Colleges have used the European Social Fund (ESF) over the last two decades to help retrain and improve the skills of hundreds of thousands of people. Under the Withdrawal Agreement, the UK will continue to participate in programmes funded under the current 2014-2020 Multiannual Financial Framework (MFF) until their closure. Guidance about ESF for 2014-2020 in England is available here.
Beyond 2020, the UK Government has promised that a 'Shared Prosperity Fund' will replace ESF though with different objectives. In the spending review announced by the UK Chancellor on 25 November 2020, there was reference to the Shared Prosperity Fund, which will be piloted in the next 12 months. There was a clear promise to spend some of the money on skills and to ramp up funding over time so that the total domestic UK-wide funding will at least match EU receipts, on average reaching around £1.5 billion a year.
Exit from the EU requires a fresh look at the funding priorities but any reduction in spending would widen existing social and economic divisions. AoC believes the emphasis should be on providing a degree of continuity by maintaining funding levels but perhaps with less bureaucracy. Funds should be targeted on areas where economic activity is lower and unemployment is higher to narrow gaps in our society and to make the country work for everyone.
The amount of ESF funding received by colleges fluctuates widely because of the stop-start nature of government procurement and the complexity of the funding rules. At its height (in 2014-5) colleges received £100 million in ESF income and £18 million in direct European grants which is high because the previous programme was coming to an end. This represented almost 2% of total income and is less in absolute and relative terms than the £1 billion a year (3% of total income) received by UK universities from EU research funds. Nevertheless, the money is very important to colleges in the more economically disadvantaged parts of the country. The money is concentrated in a small number of colleges. This is how one college used ESF funding in the 2007 to 2013 period:
“Calderdale College is running the Skills Enhancement Fund project with up to £33 million of ESF funding via the Skills Funding Agency. The project, which ends in 2015, engages with employers to invest in skills development and helps them respond to changes in market needs and the economy. Through contracts with providers and employers, the project has so far supported 43,400 starts on learning and helped people to gain over 14,700 accredited qualifications or units.”