Community groups facing financial ‘cliff edge’ over funding uncertainty – O’Dowd

Community groups in Northern Ireland are facing a financial “cliff edge” due to uncertainty over future funding, Stormont’s Finance Minister has warned.

John O’Dowd said there had been a lack of clarity from the UK Government surrounding its Local Growth Fund.

The Government has responded by stating engagement plans for the new fund will be set out soon.

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 next year.

Representatives from dozens of community and voluntary groups visited Stormont on Tuesday to raise concerns over uncertainty around future funding.

MLAs passed a Sinn Fein motion which called on the UK Government to match previous European Union (EU) funding in full and return decision making on the structural funding to the devolved powersharing Executive.

Mr O’Dowd told MLAs that previous ESF funding had been central to tackling economic inactivity, promoting inclusion, and building resilience in communities.

He said the Westminster Government’s UKSPF had not provided an “adequate solution”.

The minister said: “While there were some benefits with the Shared Prosperity Fund, it failed to match the ambition or scale of the EU programmes it replaced.

“The scope and funding were both reduced. We received, on average, £65 million from European funding per year, with local delivery via Executive departments.

“The Shared Prosperity Fund, the intended replacement, was a reduction – on average £35 million per year – with centralised Whitehall delivery.”

Mr O’Dowd said that “despite its limitations”, the UKSPF had provided vital support to the community and voluntary sector.

But he said there was now “deep uncertainty” over the replacement Local Growth Fund.

He said the community and voluntary sector faced “another impending cliff edge in funding due to the lack of certainty and the reduction in funding”.

He said it had been announced in the Spending Review in June that Northern Ireland would be be allocated £46 million a year over three years and that the Executive would be a “partner” in delivering the funding.

He added: “Unfortunately, that partnership has not materialised.

“Nor has the Labour Government honoured its manifesto commitment to restore control over structural funds to local representatives.

“Despite sustained efforts, we are back to a situation that has been deeply depressing and all too familiar in recent years.”

He said he had pressed the Government, but still had “little information” about the fund.

He said: “The scant information I do have, does not paint a promising picture.

“The £46 million per year will be heavily skewed towards capital funding.

“The Shared Prosperity Fund was three-quarters resource funding, but the Local Growth Fund will only be one-third resource funding.

“I met earlier this month with representatives of the community and voluntary sector. I listened to their concerns, and their message was clear. The significant reduction in the resource budget for this funding will severely impact the community and voluntary sector’s ability to deliver vital services, particularly for those furthest from the labour market.”

Mr O’Dowd said he would be meeting the Secretary of State for Housing, Communities and Local Government Steve Reed on Wednesday to raise his concerns.

A UK Government spokesperson said it would provide “local growth funding to support growth across Northern Ireland, once the UK Shared Prosperity Fund ends in March 2026”.

The spokesperson added: “The Secretary of State for Northern Ireland has previously made it clear that the NIO is working in close partnership with the Northern Ireland Executive and Ministry of Housing, Communities and Local Government to implement and develop the new Local Growth Fund.

“The Government is committed to engagement with stakeholders in Northern Ireland to help implement a package of funding that meets local needs and delivers impact.

“More information on the development of the Local Growth Fund in Northern Ireland and engagement plans will be set out soon.”