Briefing to the Scottish Parliament's Finance and Public Administration Committee ahead of the committee's evidence session with the UK Government's Secretary of State for Levelling Up, Housing and Communities.
The Scottish Council for Voluntary Organisations (SCVO) welcomes the long-awaited publication of the Levelling Up White Paper and the pre-launch guidance for the UK Shared Prosperity Fund.
Unfortunately, Scotland’s voluntary sector remains in the dark over how the UK Shared Prosperity Fund will reach communities that are supported by the sector and who have benefited greatly from European funding over the years.
SCVO would appreciate any support that the Finance and Public Administration Committee can provide through encouraging the Secretary of State for Levelling Up, Housing and Communities to:
Scotland’s voluntary sector relies on funding from various sources to provide support and services across the country. In 2018, the sector received around £787m from public sector grants. Voluntary sector funding is often precarious and short-term, making it difficult for voluntary organisations to plan ahead, frequently placing jobs within the sector at risk.
Scotland’s voluntary sector has benefitted hugely from European funding in the past, and voluntary organisations have strengthened our communities as a result. Across 2014-20, Scotland was allocated a maximum of €476 million from the European Regional Development Fund (ERDF) and €465 million from the European Social Fund (ESF). Without much-needed certainty around replacement funding, organisations will be unable to sustain the capacity, expertise and infrastructure that currently support places and communities.
People experiencing the greatest disadvantage will lose essential support and access to opportunities. As an example, the National Third Sector Fund (NTSF), for which SCVO has acted as the consortium lead, is a seven-year ESF-supported project that has worked with almost 7,000 people with multiple intersecting barriers to employment. While the fund has been extended for six months, the project will end in December 2022 if no replacement funding is forthcoming.
We remain optimistic that the UK Shared Prosperity Fund and the Levelling Up agenda will potentially lead to greater involvement of voluntary organisations in delivering life-changing services and opportunities in Scotland. However, it is now more than five years since the United Kingdom decided to leave the European Union, and there is still too much uncertainty for voluntary organisations in Scotland.
Scotland’s voluntary sector needs reassurance that long-term, multi-year funding will be available in the 2022/23 financial year and, if not, that bridging arrangements will be put in place for voluntary organisations in Scotland who are facing a cliff edge and have little or no resilience to manage this, due to long-standing dependence on short-term funding streams.
While there is much to be welcomed in the Levelling Up White Paper, it is difficult to establish what applies to Scotland and how. This is particularly true of the UK Shared Prosperity Fund, a crucial part of the levelling up agenda. The UK Government released pre-launch guidance for the fund this month. However, we do not expect to see full details until spring.
In the specific case of the UK Shared Prosperity Fund, further details in the Levelling Up White Paper highlight clear priorities around employability support for those facing multiple barriers. Under the UK Shared Prosperity Fund's heading, there is a specific provision in the White Paper for the voluntary sector in England, but not in Scotland.
"From 2024-25, further emphasis will be placed on investment to support life chances and skills, including for those furthest from the labour market. In England, a flexible approach in the first two years will ensure that local authorities are able to continue funding people and skills provision, provided by voluntary organisations, which would otherwise be at risk due to the tail-off of EU funds." Levelling Up the United Kingdom, page 242
We support the NCVO/ERSA-led coalition's call urging the UK Government to focus on people and skills from the start of the UK Shared Prosperity Fund, rather than delaying this to 2024/25. However, in the case of Scotland, there is no mention of what the funding approach might look like to ensure that, at a bare minimum, voluntary organisations providing employability support do not meet a funding cliff-edge. While voluntary organisations need funding that is long-term and multi-year, the immediate concern is the tail-off of European funding.
The UK Government has stated that it 'will work with devolved administrations and local partners to determine the most appropriate mix of investment priorities in Scotland, Wales and Northern Ireland reflecting the earlier tail-off of EU funds." We are deeply concerned that these discussions have not already taken place and that there is no more clarity for voluntary organisations delivering vital employment support in Scotland, both in terms of the funding that will be available and of how the policy intention of the UK Shared Prosperity Fund will align with existing priorities in Scotland such as ‘No-one Left Behind.’
Voluntary organisations are essential design and delivery partners for programmes tackling poverty and structural inequality in the devolved nations. If previous funding had continued, they would already be engaged in inclusive dialogue about identifying the needs and priorities of their communities for the next round of funding. Unfortunately, dialogue between the UK Government and voluntary organisations is limited.
The UK Government has committed to run a series of webinars and engagement activities with local authorities and other stakeholders across the UK starting week commencing 7 February 2022 as part of 'continuing engagement with partners in Scotland.' While SCVO welcomes recent engagement with the Scotland Office, we are not aware of any planned and open engagement opportunities for Scotland's voluntary sector as part of this engagement series.
If levelling up is to be successful, the UK Shared Prosperity Fund must invest in social infrastructure and human capital, and this includes the voluntary sector. The fund must take a community-based approach to tackling inequality and embrace the expertise of voluntary organisations that have been supporting local communities for many decades through European funding. The ambitions of the Levelling Up White Paper will be difficult to achieve without the expertise of voluntary organisations at all stages in the design and delivery of the UK Shared Prosperity Fund.
Projects and programmes funded through the UK Shared Prosperity Fund must be developed and delivered through cross-sector community partnerships. If, as is set out in the guidance, the funds are allocated via Scottish local authorities, there is currently no reassurance that arrangements will be put in place that are inclusive of the voluntary sector at a strategic and delivery level.
SCVO would like to see a specific requirement placed on all authorities – whether city and region growth deals, individual local authorities, or other partnerships – to include Scotland’s voluntary sector at both a strategic and delivery level of the UK Shared Prosperity Fund to ensure its accessibility and transparency and that the fund can be delivered in Scotland with maximum impact.
Policy & Public Affairs Manager