From 2014 to 2020 the UK received an average of £2bn a year in European Union structural funding to support charities and other organisations in their work to help communities, promote regional growth as well as offer employability, education and agriculture schemes.
This included funding through the European Social Fund (ESF) to support work by charities including the Salvation Army and Groundwork to support communities.
For example, Groundwork has been using European Social Fund money to deliver grants of between £5,000 and £20,000 to voluntary organisations helping unemployed people find work, courses and training in Coventry and Warwickshire and West Yorkshire.
However, this programme, like many others funded through the ESF, is now closed for applications as this pot of vital EU money comes to an end.
The UK government promised to ensure that replacement funding for such schemes was created post Brexit, to make up for this lost source of income for communities.
But when this replacement scheme, the UK Shared Prosperity Fund (SPF), was announced last year there was disappointment in the charity sector as it emerged only £2.6bn would be offered over three years.
Shared Prosperity Fund
The fund launched a year ago this month on 13 April 2022 with its first funding period running until March 2025 and alongside wider government ‘levelling up agenda’ measures.
Despite offering substantially less funding than the EU funding it replaces the government claimed it was “about levelling up opportunity and prosperity and overcoming deep-seated geographical inequalities”.
“It is also, fundamentally , about levelling up people’s pride in the places they love and seeing that reflected back in empowered local leaders and communities, a strong social fabric and better life chances,” added the government.
It is being distributed to local councils and combined authorities who are allocated a share via a funding formula, rather than a competition. This funding is then distributed among local charities, firms, and public sector bodies to spend on local priorities “against measurable goals”.
Employment charities
As with the ESF a focus of the SPF has been on improving employability.
Initially government had specified that grants from this Fund could not be spent on employability projects until 2024, the third year of the fund. However, the government last month wrote to local authorities saying they can be spent on job schemes from April this year.
There is hope the u-turn to bring forward spending on employability may save projects that had been facing redundancies and closures.
New Philanthropy Capital policy manager Theo Clay said the chance to have two years rather than one “is going to be really important for helping to get more people back into work, particularly for charities supporting people far from the labour market".
He added that charities and others had faced a “cliff edge” in funding, adding “this will be a huge relief to the organisations involved and the people who rely on that support”.
Huge news! This is going to be really important for helping to get more people back into work, particularly for charities supporting people far from the labour market. Very much welcome and a success for everyone calling for it. https://t.co/K1ZIBYK4qU
— Theo Clay (@coffeeisformugs) March 23, 2023
Employment Related Services Association (ERSA), which represents those working in the job scheme sector, has also welcomed the u-turn.
“To support the effectiveness of this suite of provision for recipients and to minimise administrative burdens on lead authorities and providers, we continue to advise lead authorities to work collectively across broader geographies to ensure the package of employment and skills interventions are fully integrated,” it said.
But a survey by ERSA in February suggests this last minute u-turn may come too late for charities and other organisations running employability schemes who were already planning to close services and lay off staff.
It surveyed around 100 charities, firms and public sector bodies running schemes and found that at the time almost two thirds (63%) were to make redundancies and more than two in five (41%) did not plan to replace schemes that were previously supported through the ESF. Just 4% said they knew if provisions will be replaced.
Those surveyed support among others, the long term unemployed, young people, ethnic minorities, over 50s and carers, to find work.
“At a time when current government policy is focused on decreasing the rate of economic inactivity, they risk losing organisations and their expertise that can help with this,” the ERSA had warned.
International study concerns
Another major piece of EU funding that the not for profit and education sectors were able to access was the Erasmus+ scheme to offer young people opportunities to study aboard. In 2019 this supported 54,619 people through 600 UK projects to study and train aboard.
But as with the SPF, the UK’s replacement for this funding pot, the Turing Scheme, also fell short.
According to figures released by the government just 38,000 students are being supported this year through the scheme, which is being managed by private outsourcing firm Capita. The Erasmus scheme, which had been able to support 16,000 more people, had been overseen by the British Council.
Labour’s shadow universities minister Matt Western said that farming the scheme to a private firm “risks selling students short” and urged the government to “guard against providers profiting off students’ aspirations".
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