To ask the Minister for the Economy (i) what approaches have been made to his Department for match funding in relation to European Social Fund projects for the 2022-23 financial year; and (ii) what provision is being made in his Departmental Budget for the 2022-23 financial year to provide match funding to European Social Fund projects during the 2022-23 financial year.

A number of stakeholders have engaged with me and my officials on this issue. My Department has pledged £6.3m in match funding for all 67 projects that successfully applied under the ESF extension period in 2022-23. When this Call was launched, we made clear that by providing this 15% contribution to all projects we had exhausted our available budget allocation. The costs being covered include an increase to the rates of reimbursement. As I have previously indicated, this extension was only made possible through the additional national budget secured and applied in 2020-21, enabling us to carry forward the unspent and replaced EU funding in that year. This is not a flexibility that exists for national funds. Therefore, my Department has invested significantly more national funding to these projects than originally planned.

On top of the EC (50%) and DfE (15%) contributions, projects need to secure an additional £14.7m (35%). Based on the information provided by projects, we understand that c£8m remains outstanding. These projects contribute to the policy objectives of a wide range of bodies and as such, historically, the balance of funding has come from a variety of sources that include other Government departments, Health Trusts and Local Councils as well as other funding organisations.

My Department did submit a bid to the Department of Finance for £5m in the 2022-25 Budget exercise to meet the anticipated residual gap but this has not been included in the draft DfE Budget allocation. As you are aware, this is currently out for consultation and I would encourage you and the impacted organisations to make appropriate representations.

Whilst the Department of Finance (DoF) leads on the replacement of EU Funding, at official level we continue to engage with DoF and Whitehall colleagues to try to ensure that the UK Shared Prosperity Fund will cover gaps that will be created when the ESF support ends. We have also proactively engaged with the Department for Levelling Up, Housing and Communities on the specific issue of ESF match funding.

We remain committed to working with projects to reduce scope and scale should they be unable to secure the full amount from other sources.