EU Enlargement Hits Charities’ Pockets

Charities providing employment and training for homeless people and the long-term unemployed are predicting mass redundancies and cuts in services as a result of delays in setting European social fund (ESF) budgets.

Homelessness charity St Mungo’s faces an 86% cut in ESF cash and says it will be forced to shut projects that last year secured jobs for 125 long-term homeless people and provided training for 1,000 more.

Andy Shields, St Mungo’s director of work and learning services, says the charity receives £640,000 a year from Europe, but due to the expansion of the EU there has been a delay in setting the social fund budget, which should run from next month. He says charities have been told money will be available from January next year, but fears this will be too late as staff will have to be laid off.

St Mungo’s concerns are echoed across London. A survey to be published later this month by the London Voluntary Sector Training Consortium reveals that of 82 organisations in the capital, running 204 employment and training projects, 73% said the immediate lack of European funding would lead to redundancies. And 88% of charities said they would face funding gaps if they could not bid for money until next year.

Charles Fraser, St Mungo’s chief executive, is calling for government crisis funding to tide them over – as is happening in Scotland – and for policy changes to protect charities from financial uncertainty. “Addressing the issue of homelessness is a long-term project that needs a long-term solution and sustained funding. It is no longer good enough to provide ad hoc funding dependent on political expediency.”

The Department for Work and Pensions, which administers the fund, denies there is a funding gap, as the 2000-06 and 2007-13 programmes will overlap. But it warns:

“There is no guarantee that providers that received ESF funding under the 2000-06 programme will be successful in applying for funding under the 2007-13 programme. This is particularly the case given the substantial reduction in ESF funding for the UK because of EU enlargement. We are therefore strongly encouraging all providers to prepare succession or exit strategies for when their ESF funding finishes.”