Fresh warnings have been issued to Michael Gove that vulnerable people risk long-term unemployment after the Tories promised to replace EU funding lost because of Brexit.
The secretary of state for levelling up is being urged by experts to put a stop to delays and cuts to the “levelling up” cash promised under the Shared Prosperity Fund (SPF).
The scheme was meant to replace grants from the European Union which Britain is no longer receiving after it exited the bloc, but it saw a £2 billion cut over three years and a year-long delay which costs poor areas in the UK another £1.5 billion.
Employment support may start to disappear
Meanwhile, vulnerable people such as school leavers, disabled people and those over 50, who were helped by EU funding to develop skills for the world of work, are also at risk, according to the Employment Related Services Association (ERSA).
In a letter to Gove, seen by The Independent, the ERSA asked when the SPF will finally kick in and how much the cuts will be compared to the amount promised to match EU money.
Elizabeth Taylor, ERSA’s chief executive, warned Gove some service providers will stop helping UK people into the world of work because of “ongoing uncertainty”.
She said: “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.”
“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.”
‘Levelling up’ Tory promise
Taylor added clarification is needed over how much money work schemes will get from the government and if local authorities will have control over the cash or if Gove will take “all the key decisions”.
The ERSA, which campaigns for high quality services for Britain’s jobseekers and low earners, has been warning about the risk of losing EU funding to job schemes over the past two years.
The new funding promised to “level up” the country by the Tories in the last general election is expected in late January, but the government’s Budget revealed the SPF will only get £2.6 billion over three years, compared to £4.5 billion which the UK would have received as part of the EU.
Meanwhile, areas such as South Yorkshire, and Tees Valley and Durham have become poorer since the last spending round and are set to lose £900million and, respectively, £750 million post-Brexit.