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Third-sector organisations providing vital support to vulnerable jobseekers are “on their knees” through lack of Government support, a Â鶹ӰԺ Leicester (Â鶹ӰԺ) expert has told a Parliamentary hearing. 

Giving evidence at a Work and Pensions Committee meeting, Professor Jonathan Payne warned that a “perfect storm” of delayed and lost funding, fragmentation, and short-term contracts threatened the future of many such organisations, many of which have closed down and have been forced to significantly reduce their services, 

Prof. Payne, Professor of Work, Employment and Skills at Â鶹ӰԺ, was invited to be on a select panel of witnesses at the Westminster hearing, which focused on the devolution of employment support, as a result of original research he and his team have carried out within the third sector. 

Such organisations, offer tailored and bespoke support to individuals around the UK who have complex needs and multiple barriers to work, including people with disabilities, drug or alcohol dependency, caring responsibilities, mental health issues, and survivors of domestic abuse. 

Surveys written and distributed to many of these groups, as part of research conducted by Prof. Payne, Professor Peter Butler, and Dr Jonathan Rose, demonstrated the vital contribution made by these organisations, with almost all of the respondents to the survey stated that they feel that the mainstream employment and skills models aren’t suitable for meeting the needs of their service users. 

Many of these organisations previously benefited from European Social Fund (ESF) funding from the European Union. While this funding has nominally been replaced by the UK Shared Prosperity Fund (UKSPF), Prof Payne explained to Desmond Swayne MP (Conservative) that the amounts on offer are significantly reduced, and funding being made available for ‘people and skills’ priorities’ has been delayed. 

TSOs are now struggling to take up contracts as they are too short, and of low value. Some private sector prime providers are additionally including TSOs in their UKSPF bids as “bid candy” to get a contract and then not providing them with any referrals. Some organisations, such as Restart, are taking large management fees out of public contracts, like Restart, and squeezing out some smaller, specialist third-sector providers from the market. 

Responding to a question from Neil Coyle MP (Labour) about the future of the sector, Prof Payne explained that the problem was so acute, that “even if we turned around tomorrow and say hay, we need this sector to come and solve the problems of economic inactivity, it might not be there.  

He added. “Staff are being lost. The capacity is being eroded. This is serious and we really need to recognise what the third sector does, we need to value it, and we need to make use of it...the sector is in crisis...the sector is on its knees, and it’s not being heard.” 

The immediate concern is to provide funding certainty. “Without a doubt they need certainty in terms of funding going forward. We need to know what is going to happen to UKSPF come March 31, 2025, and if we can’t be clear on that we need at least an interim arrangement that that funding. will roll on for a year while whatever government, whatever political stripe, decides what it's going to do next.  

“As many people have said, we desperately need to have longer term funding to restabilise the sector. That it absolutely critical. You can’t run a sector on funding that is for less than one year, and it turns out by the time you get your money you're trying to run a program for nine months.”