Michael Gove, the secretary of state for levelling up, has been alerted to “a loss of services” after a long-promised Shared Prosperity Fund (SPF) – intended to replace EU grants lost because of Brexit – was slashed by almost £2bn over 3 years.
The fund had already been delayed for a year, costing poorer areas of the UK around another £1.5bn and triggering criticism that development projects had been put at risk.
Now the Employment Related Services Association (ERSA) has warned that the work of organisations to find jobs for “the most vulnerable in society” is also under threat.
These include school leavers, disabled people and over-50s, who receive extra help to develop skills and prepare for the world of work – previously funded by grants from the EU.
In a letter to Mr Gove, seen by The Independent, the ERSA demanded answers on when the SPF would finally get under way, and on the scale of any cuts, saying that “some providers of important services will be lost because of this ongoing uncertainty”.
Elizabeth Taylor, the group’s chief executive, told Mr Gove: “This could lead to some of the most vulnerable in society no longer receiving the help they need. It is of paramount importance that this does not happen, particularly in a post-Covid economy when support is needed most.”
Key unanswered questions include how much cash will be set aside for work schemes and whether local bodies will help control the fund or Mr Gove will make “all the key decisions”, Ms Taylor said.
There is also evidence that money is being diverted to other projects, including an existing programme to improve adult numeracy skills.
Ms Taylor added: “European funding has long since been embedded in employability contracts, going back to the 1980s. It has always been able to reach people who weren’t actively involved in the labour market for whatever reason, and it’s been able to respond to local skills and employment challenges.
“We still don’t know when the new Shared Prosperity Fund will start. My concern is that, if this is allowed to drift, we will start losing providers in employment support.”
The funding pot is seen as crucial to the long-promised strategy to “level up” the country – Mr Johnson’s stated mission for his premiership – which is itself mired in delay and confusion.
It is now expected in late January, but is unlikely to include any extra funding, and is expected to focus on everything from cutting crime to restoring “pride” in local communities.
The ERSA, representing 274 organisations ranging from multinational companies to local charities, has been raising fears about the threat to job schemes from the removal of EU structural funds for two years.
The Budget revealed that the SPF would receive just £2.6bn over 3 years – much less than the £4.5bn that would have been available without Brexit – after already being delayed until 2022, 15 months after the UK left the EU.
South Yorkshire will lose a further £900m, and Tees Valley and Durham £750m, over the six years in which they were in line to receive payments, having become relatively poorer since the last spending round.
The government had pledged to match the lost EU funding after Brexit – to “tackle inequality and deprivation” – but has been accused of breaking that promise.
A government spokesperson, however, defended diverting cash to the Multiply adult numeracy programme. “It’s right for this to be delivered as part of the UK Shared Prosperity Fund, which ramps up to £1.5bn per year in 2024-25,” the spokesperson said.
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