Government urged to replace £500m EU fund for deprived communities

Failure to replace a £500 million EU fund for deprived communities post-Brexit would be "disastrous", the Government has been warned.

The European Social Fund provides half a billion pounds a year for employment and skills training in communities that are poorly served or neglected by "mainstream" support.

In a report published on Wednesday the Commons Work and Pensions Committee warned that if there was a gap in funding after exit day the consequences would be "disastrous" for providers, for local areas and for individuals.

In evidence to the committee one service provider, Graham Parry of Groundwork, explained that if there was a gap "you will lose infrastructure, you will lose knowledge, you will lose delivery, you will lose support for clients and you will lose organisations".

The committee warned that replacing ESF would be "no small investment" as between 2007 and 2013 the total value of funding was around 8.6 billion euro.

In response to concerns the Government has pledged to create a UK Shared Prosperity Fund (UKSPF) which would serve a similar purpose to current EU funding.

Labour MP Frank Field, who chairs the committee, welcomed the move but warned if action was not quick existing suppliers could be "bankrupted".

Mr Field and his colleagues, while issuing a stark warning, also pointed to the opportunities that Brexit presented for the creation of "a truly world-class successor" to the ESF that could be the "envy of Europe".

Current ESF funding is delivered in siloes and is not designed to meet individuals', families' and communities' total needs, the committee has said.

Mr Field said: "We now have an historic opportunity to create a truly fit-for-purpose successor to the ESF.

"The Government must act quickly so that those excellent existing suppliers are not bankrupted.

"Effective reform here offers the Government an important new chance to begin to fill our skills gap from the community upwards, instead of having a top-down approach."

A Government spokeswoman said: "We're committed to providing support for disadvantaged groups, which is clearly underlined by the commitment to launch the UK Shared Prosperity Fund after we leave the EU.

"The new fund will seek to reduce inequalities between communities in the UK and promote sustainable, inclusive growth based on the Industrial Strategy, and we will consult on its design in 2018"