UK Shared Prosperity Fund Investment Plans were approved by central government in December 2022, but the future remains uncertain for employment support organisations that utilised the European Social Fund with great success.
Differences across lead local authorities with regards to experience, staff capacity and geographical relationships has resulted in varied and inconsistent investment plans. Some local authorities have offered continuation funding for ESF-projects that meet the ‘voluntary sector considerations’ outlined in the UKSPF’s prospectus, but some local authorities haven’t included funding for ‘People and Skills’ at all.
This gap in funding between ESF and UKSPF ‘People and Skills’ strand has recently been raised in the House of Commons by Dr Sarah Olney, MP for Richmond Park, who asked Mel Stride in January: “I welcome the Secretary of State’s earlier remarks about looking to address the causes of economic inactivity in the over-50s. The people and skills element of the UK shared prosperity fund could be well placed to fund the kind of support that that age group needs to get back into the workforce, but that funding will not be available until 2024-25, which is much too late to address the current crisis. Will the Department work with the Department for Levelling Up, Housing and Communities to bring the funding forward to 2023-24?”
Mel Stride, Secretary of State for Work and Pensions, replied, “we are certainly in discussions with DLUHC about those kinds of matters—perhaps I will leave it at that.”
ERSA sent out a survey to our members on the end of the European Social Fund and the survey produced some worrying, but perhaps unsurprising results. In total, 95 organisations across the third, public and private sectors and from all regions of the UK, completed the survey.
On a positive note, the survey presented the fantastic, important, and life changing work that the employment support sector was able to do with the European Social Fund. The different characteristics and backgrounds of people that employability providers supported in/closer to the labour market can be seen below. At a time when current government policy is focused on decreasing the rate of economic inactivity, they risk losing organisations and their expertise that can help with this.
Worryingly, only 4.21% of organisations knew that these provisions would be replaced, with 41.05% answering that they would not. This reaffirms the earlier point that these programmes who are supporting people back into the labour market come to an end this year, with some already having ended, and will leave gaps across geographies and people will lose out on support.
Another point that ERSA has continually raised with key stakeholders is that expertise from the sector will be lost. The survey paints this picture very clearly, with 63.44% of respondents answering that staff will be made redundant. This statistic would be worrying at any time, but particularly during the current cost-of-living crisis.
One respondent outlines the bleak consequences that could take place if policy change is not implemented soon, there is “potential for an entire employment services team of 20+ to be made redundant or substantially reduced even if successful with UKSPF funding. There will also be a similar number of redundancies, with partners across the county. The level of support available to residents will be reduced regardless of funding awarded, as all indication is that if any funding is awarded it will be substantially lower than ESF funds received.”
Elizabeth Taylor, ERSA’s Chief Executive, was at the Work and Pensions Select Committee on Wednesday 8 February, where she outlined the situation facing providers and told MPs that “we have a cliff edge and if there is any way that that budget for People and Skills can be brought forward that is the No. 1 thing you could do, alongside some expansion of eligibility.”
The survey also raised issues of UKSPF having less funding than previous ESF levels, the silence from some local authorities on next steps and the fact that the impending gap will have a disastrous impact on vulnerable communities. In the current economic climate, the government needs to harness the knowledge of our sector and ERSA will continue to argue this and raise the current issues with national, devolved, and local stakeholders.
The upcoming Spring Budget may provide a policy change and some hope for current providers, but if that is the case then it is important that we continue to raise the profile of the sector by sharing the good work that we’ve done in the past and will do in the future.
Henry Foulkes is ERSA’s Policy and Public Affairs Lead and can be contacted via firstname.lastname@example.org.