Euro funding could be better spent locally — DWP official

European funding for tackling youth unemployment could have been better spent at local level, a Department for Work and Pensions (DWP) official has admitted.

The head of the DWP European Social Fund (ESF) Division, Angus Gray, told a House of Lords inquiry into youth unemployment that too much of the fund had been spent centrally.

He pledged to ensure more control over the money was handed over the bodies such as Local Enterprise Partnerships (Leps).

Mr Gray was appearing alongside Skills Minister Matthew Hancock and DWP Employment Minister Esther McVey as part of the inquiry by the Lords EU Sub-committee on the internal market, infrastructure and employment, led by Baroness O’Cathain.

Sub-committee member Baroness Valentine said: “We have received evidence from some witnesses that the use of EU funds in England is too centrally-directed and delivered and that this inhibits the development of effective local responses.

“While Leps should have a greater role in determining priorities for the next programming period, we have not been persuaded that the government’s plans give sufficient powers to actors at the local level, particularly when it comes to delivery rather than planning.”

Mr Gray said: “I think what I’d say is those criticisms are absolutely valid of the way we have run the programme to date.

“I always point out that all provision is local, individuals are being helped in a city, or in a town, in a place and they are being helped to connect to the local labour market, but nonetheless it is true that the approach I and my predecessors have been managing over the last seven years has been more national than local.

“But we are changing that for the next programme, and I am testing the faith of people out there in whether they think I am making the change I am saying we are making.”

Mr Hancock also re-assured the committee, adding: “The ESF money has now been devolved to LEPs. Maybe we can use that to demonstrate the strength of our intentions in this area.

“It is true that in many cases funding is demand-driven, i.e. when you get an apprenticeship, that triggers the government funding, rather than giving money to an intermediary to then spend in a particular area. In that sense, it is devolved right to the ground to the employer or to the individual who is doing the training.”

The ESF supports Skills Funding Agency projects worth £874m and other schemes run by the DWP and National Offender Management Service totalling £354.6m.

It also gives an allocation of funding to regions — ranging from £2.8m (Gibraltar) to £403m (London).

The ESF spending across the European Union (EU) amounts to around 10 per cent (£62.4bn) of the EU’s total budget The aim of ESF spending is to support the creation of more and better jobs in the EU.