MPs urge government to rapidly replace £500m EU skills fund

5 Apr 18

The government must act “urgently” to replace the £500m a year EU fund that supports employment in the UK, a group of MPs has warned.

The UK has a “rare opportunity” to create a “truly world-leading successor” to the European Social Fund that is the “envy of Europe”, the work and pensions committee said in a report released yesterday.

Any gap in provision – for providers, local areas and individuals – would be “disastrous”, the committee concluded.

Committee chair Frank Field said “replacing ESF would be no small investment” but the government needed to do so quickly in order that “excellent” existing suppliers of employment and skills support were “not bankrupted”.

“We now have an historic opportunity to create a truly fit-for-purpose successor to the ESF,” he said.

“Effective reform here offers the government an important new chance to begin to fill our skills gap from the community upwards, instead of having a top-down approach.”

ESF provides £500m a year dedicated employment and skills support funding for people and communities not helped by ‘mainstream’ support.

These include disabled people, prison leavers, the long-term unemployed and people with multiple barriers to work.

The government has said it will continue to fund ESF programmes due to finish after the UK leaves the EU next March. 

Although, the committee noted the current success of the fund it added it was “delivered in siloes” and was not designed to meet individuals’ total needs.

“The successor fund must act as a transition to a [system] that allows communities’, families’, and individuals’ total needs to be catered for and not restricted by arbitrary definitions of help.”

The committee report added the advantage of replacing the ESF would be the government was now “free to design employment support funding entirely in its national interests”.

It also suggested setting up an arm's-length body, to ensure grants reached existing programmes.

Graham Parry of the environmental charity Groundwork, which works with disadvantaged people, warned that a gap in funding would be a “nightmare scenario” for service users, local authorities, Local Enterprise Partnerships and support providers.

“In 2007 to 2013, the previous tranche of funding, the total value of EU and national matched funding was €8.6bn,” he said. 

The government is planning to hold a public consultation on the future of the ESF later this year, according to the report.

A Department for Work and Pensions said: “We’re committed to providing support for disadvantaged groups, which is clearly underlined by the commitment to launch the UK shared prosperity fund after we leave the EU. 

“The new fund will seek to reduce inequalities between communities in the UK and promote sustainable, inclusive growth based on the Industrial Strategy, and we will consult on its design in 2018.”

The Conservatives promised a ‘share prosperity fund’ would replace EU economic aid across the UK in their manifesto last year. 

Did you enjoy this article?