‘Uncertainty’ frustrated £2.6bn skills fund delivery, report finds

Comes months before UKSPF contract 'cliff-edge'

Comes months before UKSPF contract 'cliff-edge'

17 Oct 2024, 18:05

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Tight timelines and “uncertainty” in spending rules have frustrated delivery of a £2.6 billion skills and business support scheme, a government report has confirmed.

With just under six months left before the three-year UK Shared Prosperity Fund reaches a budget ‘cliff edge’, the Ministry of Housing, Communities and Local Government (MHCLG) has released an ‘early update report’ on how money has been spent so far.

It confirms concerns voiced by several English regional mayors, that the scheme’s has been beset by complexity, cash delivery delays and rule changes.

Between February and March this year, evaluators from Frontier Economics and BMG Research interviewed ten teams from local authorities and organisations commissioned to deliver projects in ‘people and skills’, ‘business support’ and ‘communities and place’.

Projects that are participating in the evaluation include Liverpool City Region’s £7.5 million ‘ways to work’ scheme, County Durham’s £4.9 million employment support and the Greater London Authority’s £2.9 million ‘E-business support’ with digital skills.

Unclear requirements

During the planning and delivery stages department “could have been clearer or more timely” about what its requirements would be, researchers reported.

Project teams struggled with “uncertainty” around final funding allocations, with some forced to “scale down their delivery plans” after receiving less than expected.

Most project teams said the three-year period – which stacked most of the funding’s release to the final year – was “a challenge” due to the need to plan projects.

‘Still early stages’

As a result, delivery was “typically still in early stages” when researchers carried out their interviews.

Some complained that MHCLG made changes to data monitoring requirements “even once some projects were being delivered”.

Despite interviewing project teams reaching the end of the second year of the scheme, researchers said it was “too early to tell” how beneficial projects will be “given the early stage of delivery”.

But design and planning of the UKSPF’s interventions “generally worked well” with consensus that they would not have happened without the funding, and the scheme was less “bureaucratic” than its predecessor, the European Social Fund.

Extend ‘vital’ fund

Naomi Clayton, director for policy and research at Learning and Work Institute said the report highlights the “vital” role the fund plays in flexible employment and skills provision, particularly in disadvantaged areas.

She added: “It also echoes our concerns about the short delivery window, impacted by late changes in the start date for skills investment.

“As it stands, UKSPF ends in less than six months’ time, which means projects may already be scaling down and losing staff.

“Short-termism and instability have an impact on the ability of programmes to reach their potential – and will ultimately mean that the government’s long-term ambition for an 80 per cent employment rate will be harder to achieve.

“The government needs to avoid the impending cliff edge in provision and to establish a long-term plan.”

Last week, the Local Government Association called for the scheme to be extended for 12 months to provide “stability and certainty” to councils and local businesses.

A full evaluation of what impact interventions had in 26 specific projects will cover the period up to March 2025, and will attempt to follow how many people were supported “on their journey from economic activity into employment”.

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