The European Social Fund (ESF) is a vital resource. It provides £500 million worth of employment and skills support funding every year for some of the UK’s most disadvantaged people and communities. When the UK leaves the EU, it will have to decide how to sustain this support. The Government has pledged to create a UK Shared Prosperity Fund (UKSPF) serving a similar purpose to current EU funding. Beyond that the future is uncertain.
The ESF has great strengths. It offers dedicated funding for people and communities poorly served or neglected by mainstream employability services—distinct from funding for other growth-boosting investments such as infrastructure. It also allows local areas to fund both long-term strategies and “fire-fighting” local crises such as the collapse of a major employer. Government should commit to maintaining both of these features within the UKSPF.
But the ESF also has real weaknesses. Current structures create funding siloes, preventing providers from delivering the comprehensive programmes that many of those they support really need. Government should create a new, arm’s length body—or create an arrangement with an existing one—to hold the new fund’s budget and integrate existing funding streams and objectives. The ESF is also mired in inordinate bureaucracy. At worst this can prevent small, specialist, local organisations, that have so much to contribute, accessing it at all. The UK replacement must pare back the unnecessary paperwork and focus on what really matters: delivering good value for money and innovative, life-changing support.
The UK has a historic opportunity to redesign the ESF entirely in its national interests: plugging skills gaps, increasing productivity and lifting up disadvantaged communities. But there is still much detailed design work to be done. Government does not have time on its side to complete this and ensure a seamless transition. The consequences of a gap in provision—for providers, for local areas, and for individuals—would be disastrous. The UK could create a truly world-leading successor fund that is the envy of Europe—but it must act fast.
Published: 4 April 2018