Charities have warned that employability programmes funded by the European Social Fund (ESF) are likely to end, with some already closing, as funding comes to an end next year.
Career Connect, the Salvation Army and Groundwork are among the many charities in the country that have benefited from ESF funding over the last few years.
Funding for employability programmes from the UK Shared Prosperity Fund (UKSPF), the government’s domestic replacement for ESF, will only be made available in England from 2024-25 while EU funding closes in December 2023, leaving a funding gap.
Gap in funding
ESF is a former EU funding pot that supported employment across the bloc’s member states between 2014-20. In England, the funding can be accessed until 31 December 2023, but many of the current employability programmes finish in March next year.
This year, the government launched its own UK Shared Prosperity Fund (UKSPF) to invest in three local priorities: communities and places, support for local businesses and people and skills.
Scotland, Wales and Northern Ireland can access funding from the people and skills priority – which focuses on employment and education and replaces ESF – from 2022-23.
According to the Institute for Government, the UK was allocated €11bn (£9.6bn at current exchange rates) of EU structural funds between 2014 and 2020. Of this, €5.1bn came through ESF.
UKSPF is worth £2.6bn over the next three years, with England being allocated £239m in 2022-23, £409m in 2023-24 and £918m in 2024-25, totalling £1.6bn.
In England, funding to support people and skills commences from 2024-25 onwards – or earlier for places that “meet the voluntary sector considerations”, meaning that charities will face a funding gap.
Barry Fletcher, chief executive officer of Career Connect, said he is aware of a lot of organisations closing down services in various part of the country. “In some cases, whole organisations are being impacted by that,” he said.
Fletcher said that ESF is the largest source of foreign funding for employment skills programmes in the UK and that its loss is having a “massive impact” on beneficiaries, particularly those in England.
“Ultimately, young people and adults who get that help will be the ones who suffer. There is a knock-on effect to charities and organisations involved in delivering those services,” he said.
‘Painful decisions’ might be made
Career Connect currently has four ESF-funded programmes which support about 4,000 people a year.
Fletcher said he is mostly worried about the impact on beneficiaries but acknowledged that it might also have ramifications on his charity and staff.
He said: “If we can’t secure alternative funding, then we would potentially have to make some painful decisions. I know that there’ll be lots of organisations who will have to do that as well but we aren’t at that stage yet. My charity is growing in other areas, and therefore we’re able to potentially move people from that to something else but that isn’t the case for lots of organisations. We won’t necessarily be able to replicate that programme.”
He added that many smaller grassroots charities have relied on this type of funding for a long period of time, especially because it has “always been targeted at the most deprived areas of the UK”. “Areas that need it most, [such as Cornwall and Liverpool] are losing out on that support.”
UKSPF money might not reach ‘areas that need it most’
The Salvation Army has also benefitted from EU funding. Its Employment Plus (E+) service operates in over 650 locations around the UK and Republic of Ireland.
Rebecca Keating, director of E+, said the charity is “looking at ways to keep this work going, which includes constructive talks with local authorities”, as funding for E+ schemes is “uncertain”. “This work is too crucial to drop,” she said.
Keating argued that the way UKSPF is structured will make it “more difficult to ensure the money reaches the areas that need it most”.
“Firstly, the money isn’t ring-fenced. UKSPF can be used in three broad areas: ‘communities and place’, ‘support for local businesses’ and ‘people and skills.’ While we agree local authorities should have the power to decide how best to allocate funding pots, their budgets are already stretched. As local need grows, councils are essentially being asked to do more with less money.
“This is a particular risk because people who are economically inactive are especially hard to reach and often overlooked until their circumstances meet crisis point. To combat this, we’re calling for local authorities and Local Enterprise Partnerships to set a target for supporting people back into work and then ring-fence enough money from UKSPF funding to meet their target.
“Secondly, although local authorities can choose how to spend the money, they’re still expected to bid for it. This puts those with little expertise or resources in funding stream bidding at a considerable disadvantage.”
‘Many good initiatives will be lost’
Groundwork runs several Building Better Opportunities (BBO) programmes across the UK that support vulnerable individuals who are out of work. The programmes are funded by ESF and the National Lottery Community Fund.
Graham Duxbury, chief executive of Groundwork’s UK, said: “The end of ESF funding has been on the horizon for charities delivering employment support and skills training for a number of years and, although the government has replaced ESF with a UKSPF, the value of this is likely to end up lower and charities will need to influence bids submitted by local authorities in order to benefit. The fact that this particular cliff edge has been well signposted means there has been time to diversify funding but many good initiatives will undoubtedly be lost.
“At Groundwork, we’re particularly concerned about programmes providing intensive support to those furthest removed from the labour market. Even with high levels of job vacancies many people need additional support and coaching in order to connect with economic opportunities. In several parts of the country, we have been able to do this thanks to BBO. Mainstream government programmes simply don’t fund the level of resource needed to deliver positive outcomes for many of these groups.”
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