Replace EU funding with new grants programme, says NCVO

01 Dec 2017 News

NCVO and the Employment Related Services Association (ERSA) have outlined how they think successor to the European Social Fund could work to improve the outcomes for vulnerable people. 

In a paper, Future employment and skills training for disadvantaged groups: A successor to the ESF, published today they have outlined six design principles that they would like the government to follow when design any successor fund and called for an emphasis on grant funding. 

The two bodies brought together a working group in 2017 which included leaders from skills and training, employment support, civil society, children and youth, local authority, Local Enterprise Partnerships (LEPs) and private sector organisations, as well as frontline providers of ESF. 

Between 2007 and 2013 the UK benefited from €8.6 billion (approximately £7.7bn) in ESF funding, including national match-funding. A further €3.5bn (approx. £3.1bn) has been allocated to the UK for 2014-2020.

Today’s paper has been endorsed by 29 organisations including the Association of Charitable Foundations, Acevo, the Charity Finance Group, Groundwork, the Salvation Army and Barnardo’s. 

The paper warns that: “The withdrawal of ESF without a replacement programme in place would have a serious impact on the vital support some of the most disadvantaged communities receive.” 

It calls for any successor fund to provide equal or greater levels of funding. 

It calls for a “holistic” approach and better co-ordination between health, wellbeing and employment services. 

The paper says this could save the government money. 

“A successor initiative to ESF based on a multi-agency and multi-sectoral community partnership approach, combined with long-term funding, similar to ESF timeframes and across parliamentary terms, would not only facilitate better service integration, it could also provide significant cost savings for the Exchequer as highlighted by the NAO,” it said. 

‘Grants should be the preferred procurement method’ 

The paper says that competitive grants should be the “preferred procurement method” because this “often provides excellent value for money”. 

“Using grants does not have to be a risky investment for funders. For example, foundations manage risks with staged payments, robust reporting, and grant agreements. Indeed, grant funding can avoid being overly prescriptive or locking providers into set ways of running their services,”

Where payment-by-results is used it said the amount provided up front “should be calculated on an assessment of the ability of the provider market to cope with the financial risk and cash flow implications”. 

It also called for more smaller contracts to widen access to the fund. 

Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, said: “The European Social Fund has had a significant impact on the ability of vulnerable groups to fulfil their potential, participate in society and contribute to economic growth. Failure to replace it would have serious consequences, not just for the support disadvantaged groups receive, but also for inclusive growth and social cohesion in the UK.

“With the UK poised to leave the European Union, the government now has a unique opportunity to improve the design and delivery of employment and skills funding. This is why NCVO and ERSA have brought together experts in learning, skills and employment provision to develop a framework for a successor fund that helps our nation achieve its post-Brexit potential.”

The six design principles are: 

1. Taking a holistic approach and promoting integration between health, wellbeing and employment services
2. Basing delivery on a multi-sectoral partnership approach designed around people
3. Fostering innovation and involving new actors in the design and delivery processes
4. Including programmes with a mix of short-term and long-term funding to ensure both flexibility and stability
5. Supporting a quicker process to identify need and allocate funds
6. Ensuring ease of access for providers of all sizes and sectors


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