1.The UK has a historic opportunity to design a truly world-class successor to the European Social Fund. It will be free to design employment support funding entirely in its national interests: plugging skills gaps, boosting productivity and lifting up disadvantaged communities. Its replacement fund could be the envy of Europe. But time is not on the Government’s side. It must act now to guarantee certainty for providers and communities and avoid a potentially disastrous interruption in funding. (Paragraph 15)
2.The European Social Fund has real strengths. It also has weaknesses that a UK successor must address. Retaining a separate budget within the UK Shared Prosperity Fund (UKSPF) to support disadvantaged communities and groups is essential. This budget should remain separate but complementary to national provision, funding both long-term strategies for local areas and “fire-fighting” responses to local crises. The new fund should remove the siloes that prevent truly wrap-around, holistic support reaching communities and individuals. It must also pare back the inordinate time-consuming paperwork that accompanies the current fund. At worst, this prevents small, specialist organisations, that have so much to contribute, participating at all. At best it is a drain on resources that would better be spent delivering innovative, life-changing and productivity boosting support. (Paragraph 16)
3.We recommend the Government proceed urgently with detailed design of a successor to the European Social Fund so that there is no gap between existing and new funding streams. This should include:
a) establishing a new arm’s length body, or creating an arrangement with an existing one, to hold the fund’s budget, dovetailing existing funding streams so programmes can meet effectively all of their participants’ needs;
b) retaining a separate fund within the UKSPF for employment support. The separate fund should focus on innovative projects that offer work opportunities and skills development to disadvantaged groups (for example, disabled people) in areas of clear economic and social need.
c) ensuring flexibility of local funding mechanisms for both longer-term (with funding cycles of at least seven years, as in the current fund) and short-term programmes; and
d) reducing overall bureaucracy for providers enabling them to focus on what really matters: value for money, building understanding of “what works” in employment support, and fostering new entrants.
4.These features are vital to the success of a replacement fund. But they would also have wider political resonance. They would show Government is committed to joined-up policymaking and breaking down silos, enabling better use of public money to meet clearly defined policy goals. We recommend the Department set out how it will meet these objectives, and a timetable for doing so, in response to this report. (Paragraph 17)
Published: 4 April 2018