Letting UKSPF go over the cliff edge in 2025 spells disaster

As a general election looms ever closer, one thing all political parties have in common is their silence on what will happen to the UK Shared Prosperity Fund (UKSPF) beyond March 2025.  The UKSPF is a central pillar of the UK Government’s ‘Levelling Up’ agenda. The fund replaced European funding following the UK’s withdrawal from the European Union and is providing £2.6 billion of new funding for local investment by March 2025.

Brexit failed to deliver for the employability and skills sector.  €16.4 billion (around £15.4 billion at July 2020 exchange rates) was received by the UK during 2014 to 2020 through European Structural and Investment (ESI) Funds.  In contrast, a mere £2.6 billion of UKSPF funding over a 3-year period was made available by the UK Government. This was never going to have the impact nor fill the void left behind by European funding. 

As was widely predicted and as I set out in my June 2022 article in these pages, a large chunk of this funding was swallowed up by local authorities after years of austerity. Very little money actually made it out of town halls to sustain organisations who were struggling to survive after European funding came to an end.

Whitehead-Ross Education has been very fortunate to secure £2.4 million of UKSPF contracts across nine local authorities in South Wales and South West England. Despite very tight implementation timescales and many local authorities lacking concise guidance from the Department for Levelling Up, Housing and Communities (DLUHC), the funding is enabling us to support almost 1,900 participants. This includes providing support to disengaged young people to re-enter education and employment, delivering Multiply numeracy provision and providing digital upskilling for economically inactive individuals among other activities.

All of this work is delivered in economically disadvantaged communities across the UK and targeted at supporting the hardest to reach. And all of this work is at risk beyond March 2025 as all political parties fail to commit to further funding for the UKSPF. It was bad enough that the UK lost £15.4 billion of European funding. Now, we are on track for seeing the UKSPF go over the cliff edge come March next year.

I have heard rumours in Wales that plans are being drafted by DLUHC for UKSPF 2.  However, a decision needs to be made fast otherwise local authorities will have little time to plan and finalise their procurement processes ahead of March 2025.  Once a general election is called and we enter purdah, government decision making will grind to a halt. We therefore need all political parties to commit now to sustaining the UKSPF to enable proper planning and sustainability of valuable projects.

Economic inactivity – the proportion of people who are neither working nor looking for work – has risen since the pandemic. In 2022, 22 per cent of working-age people in England, Scotland and Wales were economically inactive – some 2.5 million individuals – in spite of workforce shortages in key economic sectors.

The European Social Fund and now the UKSPF have enabled projects to provide tailored and specialist support to target priority groups such as those suffering from ill health, the over-50s, young people and single parents.

Just this week, shadow work and pensions secretary Liz Kendall announced that ‘a life on benefits’ will not be an option under a Labour government. If the phrase ‘a life on benefits’ seems familiar, it might be because it appeared in chancellor Jeremy Hunt’s Conservative conference speech last November. Clearly, the major parties agree that unemployment is a scourge and major economic headwind.

Without a shared prosperity fund, there is no plan and no money to support the groups who are most at risk of enforced worklessness back into the workplace. The predictable consequence will be rising inequality and a failure to move the dial on the number of benefit claimants.

For all these reasons, Westminster must offer clarity and certainty about the future of this vital funding without delay.