The government must immediately draw up plans for replacing the European Social Fund (ESF) and prevent a “potentially disastrous” interruption in funding for employment and skills support in some of the country’s most deprived areas, a committee of MPs has warned.
A report published today, following an inquiry by the Commons work and pensions committee, says evidence provided by witnesses showed the transition from the ESF to its successor must be “seamless and immediate” to prevent the loss of support services for certain groups, including people with disabilities, the long-term unemployed and those with multiple barriers to work.
The ESF currently provides £500m a year for employment and skills programmes. The government has said it will continue to fund ESF programmes scheduled to finish after the UK leaves the European Union.
The Conservative manifesto pledged to establish the UK shared prosperity fund to replace existing European structural and investment funds, which include the ESF.
However, the report raises concerns that a planned public consultation on proposals “later this year” could lead to a damaging delay.
It added: “[The government] must act now to guarantee certainty for providers and communities and avoid a potentially disastrous interruption in funding.”
Appearing before the committee, Birmingham City Council interim chief executive Stella Manzie said an end to equivalent ESF funding would be “catastrophic”.
Graham Parry of support provider Groundwork told the committee a gap in funding would result in the widespread loss of support organisations.
The committee called on the government to “proceed urgently” to ensure there is no gap between existing and new funding.
It recommends the establishment of a single organisation to hold the new fund’s budget, with a reduction in bureaucracy for support providers and mechanisms for longer-term funding cycles to enable strategic planning by councils and local enterprise partnerships.
Committee chair Frank Field (Lab) said: “We now have an historic opportunity to create a truly fit-for-purpose successor to the ESF.
“The government must act quickly so that those excellent existing suppliers are not bankrupted.
“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.”