In 2023, EU funding to charities and community groups in Northern Ireland from its European Social Fund was ended because of Brexit
The UK Government is “still not listening to the warnings” from the voluntary sector about the impact of replacing EU funding schemes in Northern Ireland, MPs have said.
In a report, the Northern Ireland Affairs Committee also warned that more support is needed for small and medium sized businesses (SMEs) to encourage economic growth in the region.
In 2023, EU funding to charities and community groups in Northern Ireland from its European Social Fund (ESF) was ended because of Brexit.
It was replaced by the UK Shared Prosperity Fund (UKSPF), which will in turn be replaced by the Local Growth Fund.
That new fund has a 70/30 capital-to-revenue split, resulting in funding cuts to the voluntary and community sector and prompting the Executive to write to Communities Secretary Steve Reed calling for a more favourable resource allocation.
Monday’s report from the Northern Ireland Affairs Committee follows an inquiry launched to understand how economic growth in Northern Ireland could be enhanced by UK Government economic initiatives.
Labour MP Tonia Antoniazzi MP, chair of the Northern Ireland Affairs Committee, said “one of the keys to economic growth is tackling economic inactivity”.
“We are frustrated that the Government is still not listening to the warnings from across the voluntary and community sectors about the impact the funding make-up of the new, local growth fund will have on the ability to help people into and stay in work,” she said.
“It’s imperative that the UK Government recognises the clear need for current spending to fund employment support services and either reverses the 70/30 capital-revenue split or support the sector to find the funds elsewhere.”
The report also urged the Government to work more closely with the Stormont Executive on economic issues and says that the multiple bodies providing support in different ways may be confusing,
The committee recommends establishing “a completely overarching one-stop shop for SMEs to help them invest and grow and take advantage of East-West and North-South trading opportunities”.
The report concludes that Northern Ireland’s productivity and skills challenges are long-standing and well known, and criticises the Executive for failing to grip these problems, as well as chronic issues with inadequate infrastructure and delayed planning decisions.
Ms Antoniazzi said Northern Ireland’s economy “has performed well in recent times but there are still challenges holding it back”.
“The many central and devolved government economic missions, strategies and support bodies can be bewildering to businesses, while a lack of investment in skills and infrastructure is having a detrimental effect on growth, particularly beyond Belfast.
“Economic development is the responsibility of Stormont, and the Executive has been under-performing itself in this area for too long.
“But the UK Government cannot afford to ignore these obstacles, given its core mission of kickstarting economic growth right across the UK.”
A UK Government spokesperson said the Local Growth Fund “will support the delivery of long-term infrastructure to boost economic growth across the UK”.
“Northern Ireland will receive £45.5 million in each of the next three years, on top of its record £19.3 billion annual funding settlement,” they said.
“For economic inactivity programme funding, the UK Government and the Northern Ireland Executive are working together to try and find a way forward that provides organisations with the clarity they need to plan for this year.
“We continue to work with the Executive and the sector to reach the best outcome possible by the time the Local Growth Fund begins delivery on 1 April.”
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