Failure to replace European Social Fund ‘disastrous’, say MPs

A report published by the work and pensions committee says that any gap in payment between the existing European Social Fund (ESF) and a new fund would be ‘disastrous’ for the UK.

The ESF provides £500m a year dedicated employment and skills support funding for people and communities who are poorly served or neglected by mainstream employment support.

The committee said the UK has a rare opportunity to ‘create a truly world-leading successor’ to the European Social Fund ‘that is the envy of Europe’, but it must be implemented quickly to minimise negative consequences of a gap in provision for providers, local areas, and individuals.

The report criticised the current structure as creating ‘funding siloes’ which ‘prevent providers from delivering the comprehensive programmes that many of those they support really need.’

It said that the successor fund must act as a transition to a system which allows the ‘total needs’ of communities, families, and individuals to be catered for and not restricted by arbitrary definitions of help.

The committee made the following recommendations to government:

• ensure funds are available so there is no gap between existing and new provision
• establish a new arm’s length body, to dovetail grants to existing funding streams so programmes can meet effectively all of their participants’ needs
• retain a separate fund within the UK shared prosperity fund for employment support for disadvantaged groups and communities
• ensure flexibility of local funding mechanisms for both longer-term and short-term programmes; and
• cut bureaucracy for providers, in getting money to projects that work or to new projects that show entrepreneurial skills

Frank Field, chair of the committee, said: ‘We now have a 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.’

In evidence to the committee one service provider, Graham Parry of Groundwork explained that if there was a gap ‘you will lose infrastructure, you will lose knowledge, you will lose delivery, you will lose support for clients and you will lose organisations.’

• Read the report here