Vulnerable people at risk of long-term unemployment will be left without help because of delays and cuts to “levelling up” funding, experts are warning.
Michael Gove has been alerted to “a loss of services” after a long-promised Shared Prosperity Fund (SPF) – to replace EU grants lost because of Brexit – was slashed by almost £2bn over 3 years.
The fund had already been delayed for one year – costing poorer areas of the UK around another £1.5bn – triggering criticism that development projects have 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.
They include school leavers, disabled people and over-50s, who receive extra help to develop skills and prepare for the world of work – previously funded from the lost EU grants.
In a letter, to Mr Gove, the levelling up secretary – seen by The Independent – the ERSA demands answers on when the SPF will finally get underway and on the scale of any cuts.
Otherwise, “some providers of important services will be lost because of this ongoing uncertainty”, Elizabeth Taylor, the group’s chief executive, has written.
She tells 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 what cash will be set aside for work schemes, whether local bodies will help control the fund, or whether Mr Gove will make “all the key decisions”, Ms Taylor says.
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 the SPF will receive just £2.6bn over 3 years – not the £4.5bn 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 six years that they were in line to receive 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.
But a government spokesperson 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.
