Employment services charities have reported that some of their staff will be made redundant when European Union funding for their services end in the coming months.
Last month, the Employment Related Services Association (ERSA) surveyed its members, which comprise third sector, public and private organisations across the UK, on the end of the European Social Fund (ESF).
It found that 64% of third sector organisations expect to lose staff as a result while 44% do not expect European-funded provisions to be replaced.
Loss of staff
In total, 95 local organisations completed ERSA’s survey. Of these, 55 identified as third sector organisations.
Almost two-thirds of the 53 charity respondents that provided an answer said that staff will be made redundant when ESF ends.
Nearly a third of all voluntary sector respondents will see their existing European funding end next month while nearly 20% said it will stop in January.
More than three-quarters deliver these services to long-term unemployed people, while most also supported under-25s, Black, Asian or other minority ethnic groups and disabled or long-term sick individuals.
One respondent said: “A lot of participants/referrals will lose access to support, several members of the team will lose their jobs. Talks are in the process for alternative funding but it’s unlikely to come through before our ESF funding finishes. There is very likely to be a gap before UKSPF prosperity funding. We will likely lose valuable members of staff and relationships with referral partner will start to diminish if we're unable to offer any alternatives.”
Another said: “Our organisation is currently on a cliff edge with funding ending. Although funds are potentially available for the most part this is not available until 2024-25 which could be too late. Anticipated replacement funding through UKSPF is on the large part delayed, even though it was seen as the replacement for ESF funds.
“We have been unsuccessful in some districts within our Local Enterprise Partnership (LEP) area and await opportunities to bid in to other funds for Year 2 (2023-24) which could well be too late to retain valuable staff and programmes. We’re closing the project down and going through consultation and restructure for our organisation. We’re busy building up new streams of income from a variety of sources and income types.”
Unlikely to provide like-for-like replacement
ESF is a former EU funding pot that supported employment across the bloc’s member states between 2014 and 2020. In England, the funding can be accessed until 31 December 2023, but many of the current employability programmes finish in March this year.
The government recently launched its own UKSPF to invest in three local priorities: communities and places, support for local businesses and people and skills.
UKSPF is worth £2.6bn over 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.
Respondents to the ERSA’s survey said that UKSPF is unlikely to provide like-for-like funding replacement.
One respondent said: “In our experience, lower tier authorities who are now making decisions on UKSPF don’t have knowledge or first-hand experience of commissioning skills provision, have scant resources for pulling together investment plans to the timescales required. This has sometimes meant that they lean heavily on external consultants who produce investment plans to standardised approaches, rather than the truly local responses envisaged by the Department for Levelling Up, Housing and Communities.
“Devolution to lower tiers also means that, where we have dealt with one or two LEP areas for ESF, we now need to engage between 12 and 16 different authorities. This does not lead to the more simplified, less bureaucratic process that was envisaged for UKSPF. Finally, commissioning skills provision at lower tier level may not be the most appropriate or cost-effective or approach, since this provision needs to take account of labour market conditions and travel to work areas that are often overlayed across a number of smaller authority areas.”
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