Universities UK: Local Communities Facing Skills, Training, and Jobs Setbacks

• Over one hundred local training, business support and skills projects face an uncertain future without urgent government action.

• Vital training, skills development, and jobs at risk.

• Retraining, upskilling and support for small businesses essential to the success of levelling up.

Urgent action is needed from the UK Government to bridge the funding gap while it sets up its replacement for European Union funding for local skills and training partnerships. 

The UK Government is creating the UK Shared Prosperity Fund (UKSPF) to award £2.6 billion of new funding for local investment by March 2025 in place of European Structural and Investment Funds (ESIF) which the UK is no longer eligible for having left the European Union.

There are currently 192 university-led projects in England, funded by £412 million of ESIF money, providing high quality skills training, and supporting local pay, employment, and productivity growth, with half working with small and medium size businesses. In Wales, there are 53 projects led by universities with £300 million investment from ESIF.

As many as 164 projects could stall or stop, though, as their European Union funding runs out by the end of next year and the UK Government’s full replacement funding does not come into effect until 2024/25. Uncertainty on the allocation of the UKSPF will leave a significant gap in funding, putting vital community projects and the jobs of experienced staff at risk.

The type of projects that could be impacted include:

• The FLEXIS App project, led by Cardiff University, is generating green and economic growth across Wales through industrial partnerships collaborating on the commercialisation of research to decarbonise future energy supply. The project has received most of its funding, almost £3 million from the ESIF programme, which runs out in November 2022.

• Productivity Through Innovation (PTI) is a project delivered by Nottingham Trent University, University of Nottingham and University of Derby to help around 200 local SMEs increase turnover, competitiveness and profitability. The project is receiving £3.5 million from the ESIF - half its total funding - which runs out in March 2023.

• The Gloucestershire Growth Hub is a business support service delivered through a partnership between the University of Gloucestershire, the GFirst Local Enterprise Partnership (LEP), and other partners. Since 2017, half of its funding has come from the ESIF, around £3.4 million, which runs until March 2023, and it has received matched funding from the University of Gloucestershire in partnership with GFirst LEP. It is estimated that the Growth Hub, located in the university’s business school, has supported Gloucestershire businesses to create 1,200 jobs, £155 million Gross Value Added (GVA) and boosted turnover by £400m since 2014.

• The University of Manchester’s Bridging The Gap programme, delivered by the Graphene Engineering Innovation Centre (GEIC), accelerates the adoption and commercialisation of graphene and 2D materials. The programme has engaged with more than 200 SMEs, generating new products and jobs, and has enabled a thriving start-up community. The project is receiving £1.9m from ESIF, which will end in December 2022.

Alex McDermott, Managing Director of Nationwide Engineering, a medium-sized construction firm that entered the programme in 2020, said: 

“Bridging The Gap enabled our company to explore the potential of graphene within a range of construction materials. We entered into a collaborative R&D programme with The University of Manchester to develop a graphene-enhanced concrete product that offers significantly improved strength whilst reducing overall CO₂ output.  The collaboration has been so successful that we are filing Intellectual Property, have created a new subsidiary and are employing several new roles within Greater Manchester.” 

Alistair Jarvis CBE, Universities UK Chief Executive, said:

“Universities fully support the intentions and ambitions on levelling up set out by the UK Government. Addressing levelling up is a compelling moral duty and an economic, social and cultural necessity. Universities are central to economic growth, improving skills, creating opportunities, and generating prosperity for everyone in the UK.

“Given the importance of universities to levelling up, the uncertainty around the implementation of the UK Shared Prosperity Fund, especially the timing, seriously threatens many projects in all four nations of the UK directly supporting local employers, jobs, and communities. We need clarity and continuation funding to fill the financial gaps otherwise community groups and businesses will miss out on vital training and upskilling opportunities.

“Many universities do not have the money to fund these projects themselves in this tough economic climate of rising inflation, the further freezing of tuition fee levels, and higher pension and national insurance costs.”

Notes to editors

Universities UK has written to The Rt Hon Michael Gove MP, Secretary of State for Levelling Up, Housing & Communities outlining the university sector’s support for levelling up and its concerns around the initial plans for the UK Shared Prosperity Fund.

European Structural and Investment Funds (ESIF) consist of five funding programmes working together to support economic development across all EU countries, in line with the objectives of the Europe 2020 strategy. These include the European Regional Development Fund (ERDF); European Social Fund (ESF); Cohesion Fund (CF); European Agricultural Fund for Rural Development (EAFRD); European Maritime and Fisheries Fund (EMFF).