Successful campaign unlocks funding for marginalised unemployed

The Employment Related Services Association (ERSA) has welcomed the lifting of a government restriction which will enable local authorities across England to allocate UK Shared Prosperity Fund money to people and skills support programmes from next month, April 2023. Previously this vital funding pot to support some of the most marginalised and disadvantaged unemployed people in society was mothballed until the 2024/25 financial year, leaving a catastrophic gap in replacing previous European funding.

This original scheduling of UKSPF monies was met with condemnation by the employability industry and attracted widespread media comment when first aired in late 2021, and later confirmed in UKSPF pre-launch guidance. Following a concerted campaign by ERSA and its members – which comprise local authorities, housing associations, specialist employability and skills organisations – DLUHC has removed the restriction on spending in this area a year early.

ERSA tirelessly engaged with Ministers and provided both qualitative and quantitative evidence to policy makers at the Department for Work and Pensions (DWP), Number 10, and DLUHC demonstrating the employability sector’s effectiveness in reaching those disengaged from Jobcentre Plus programmes. Without bridging the gap in lost European funding, which ends in March 2023, thousands of vulnerable people would lose support, and expertise would disappear from the sector as smaller support organisations struggled for funding.

Yet concerns remain that commissioning delays and lack of planning will still create barriers to the effective spending of this money. ERSA’s Chief Executive Elizabeth Taylor broadly welcomes the new spending schedule but highlights that it’s not the lifeline many were hoping for:

“We are relieved and pleased with the Government’s acceptance of the evidence we submitted and the announced change in funding restrictions,” she said. “Specialist employment support programmes, delivered at a local level, are an ideal way of supporting economically inactive people back into the labour market and I thank ERSA members that submitted data and examples of good practice to illustrate that.

“However even with this latest announcement, there is no requirement for local authorities to actually fund employment and skills in 2023. Relevant provision may not have been made in their current investment plans which are now being implemented. There cannot be a reliance on busy local authorities to bring this money forward without a national initiative and technical support to do so. Some authorities will not have the capacity, the statutory duty, nor the in-house expertise to effectively utilise this funding quickly. We fear there will still therefore be a gap in funding which will have a detrimental impact on the employability sector, the people it supports, and the wider labour market.

“ERSA strongly recommends that the people and skills strand of UKSPF is relaunched with a new funding round to meet current labour market shortages, economic inactivity, and to improve job prospects for households that need to increase their income. We continue to work with the relevant Government departments, local authorities and our member organisations to provide meaningful support in accessing and effectively utilising UKSPF funding.”

DLUHC’s statement in full:

The Prime Minister recently set out a clear direction to focus on building the skills capability of people across the UK, so that they can realise their potential and increase workforce participation rates and our prosperity and productivity as a country.

The UK Shared Prosperity Fund is already well aligned with this goal as the main source of funding to support economically inactive individuals move towards employment. To maximise the impact of the Fund in this area, we will remove the restriction on people and skills spending from April 2023 in England. This will enable lead local authorities to allocate UKSPF funding to any people and skills intervention to an individual, partnership or any delivery partner, during the second and third year of the Fund. Previously, this flexibility was not available in England until April 2024.

We will continue to stand by our pledge to let local places decide what is best for their areas, working closely with key stakeholders, and deploy funds flexibly across the local growth agenda and UKSPF funded employment priorities which are intended to dovetail with the national Department for Work and Pensions offer and other locally delivered complimentary support, including Multiply. 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.

This change will be done with the least amount of bureaucracy as lead local authorities can make these changes through routine end-of-year reporting, no additional notifications to DLUHC will be required.