1. VCSE submission on London European Structural and
Investment Funds Strategy 2014-2020
Prepared by London Voluntary Service Council for the London Enterprise Panel
London Voluntary Service Council (LVSC) represents the voluntary and community
and social enterprise (VCSE) sector in London, bringing together VCSE
organisations to learn, share best practice and to create a co-ordinated voice to
influence policy makers on issues affecting Londoners. It specialises in employment
and skills policy work through coordination of an extensive network of VCSE
employment and skills providers working in the capital.
The VCSE sector has played a key role in the design and delivery of European
Structural Funds in London in recent years. In addition, LVSC’s employment and
skills provider network supports VCSE sector representation on the London
Enterprise Panel’s Skills and Employment Working Group and the London European
Social Fund (ESF) Regional Committee.
The purpose of this submission is to inform the London Enterprise Panel (LEP) of the
intelligence, expertise and support VCSE organisations can bring to the preparation
of its European Structural and Investment Funds Strategy 2014-2020. The
submission has been developed by LVSC, incorporating feedback and comments
received during the Forum on European Funding 2014-2020 event on 25 July 2013,
which was attended by 100 people. An appendix to the submission describes the
size and economic contribution of the VCSE in London.
2. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 2
VCSE Vision for London
Health inequalities in London are stark. Between London boroughs there are
life expectancy gaps of 9.1 years for men and 8.7 for women… Rising
unemployment, poorer working conditions, depressed incomes and an
inability to pay for decent housing and basic needs will all increase negative
mental and physical health outcomes across the social gradient and
especially for more vulnerable groups. ...However, there is still great wealth
within London. Where money is available, providing people with the security
of a minimum income for healthy living will not only save lives, but should also
stimulate demand led growth.
Professor Michael Marmot
London is a wealthy city. We can afford to be fair. It is not always a happy,
healthy or productive one. We cannot afford to be unfair.
David Robinson, Community Links
We want a city where life expectancy increases, where public health is better,
where we narrow the gap between rich and poor and produce steady
improvements in academic attainment.
Boris Johnson, 2020 Vision The Greatest City on Earth
The values of VCSE organisations align closely with European and UK priorities for
European funds in 2014-2020. Our vision for London is one which delivers equality
to, and celebrates the diversity of, its people and communities: one where all
Londoners benefit from the city’s wealth of opportunities.
At the moment, however, London is the most unequal city in Britain. Four out of ten
children in London live in poverty. Many thousands of Londoners suffer worse
employment, skills, and earning outcomes than their counterparts in the rest of the
UK: among them lone parents, young Black men aged 18-24, and deaf and disabled
people. The introduction to the LEP’s Jobs and Growth Plan, ‘London: A Tale of Two
Cities?’, sets out the city’s inequality problem in some detail. Despite the best
intentions of a wide range of mainstream employment and skills programmes, these
The 2014-2020 European funding programme represents an ideal opportunity to
address our city’s shameful rates of inequality and child poverty. The new
programme comes at a time when, for thousands of low income and workless
households in London, life is set to get even tougher. Over the coming months, the
government will continue the roll out a programme of radical reform to the welfare
system (benefit caps, Universal Credit, in-work conditionality, etc) which, according
3. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 3
the Institute for Fiscal Studies, will further increase poverty rates, particularly those of
Strategic, responsive, and well-targeted use of European funds can tackle these
chronic social problems. Further, it could also represent a major economic
opportunity for the city: by improving the specialist employment and skills support
available to disadvantaged communities in London, we have an opportunity to
empower individuals to develop and put their skills to use, and develop the
entrepreneurial drive of thousands of Londoners who would otherwise remain social
and economically excluded.
A more equal London will have further benefits, too, as improved cohesion, greater
civic engagement, and inclusive regeneration help bind us against the growing
inequality and social disorder that has tarnished our city’s reputation in recent years.
The VCSE offer in London
The VCSE is committed to working with the LEP, Greater London Authority (GLA),
and London co-financing organisations (CFOs) to ensure London gets the best
possible social and economic outcomes from its allocation of European funds in
2014-2020. In return, strong engagement with the VCSE can add enormous value to
the design, delivery, and governance of EU programmes.
• We are a significant player in the London economy: the total annual income of
the VCSE sector in London is in the region of £19.6 billion. This includes
charitable grants, income from statutory contracts, and donations from the public
and corporates, representing a significant source of potential match for EU
funds in London.
• Charities are a major employer in London, comprising 6.7% of London’s paid
workforce in 2008/09, and facilitating many thousands more hours of volunteer
time beyond that. We are more likely than the private and public sectors to
employ workers from disadvantaged backgrounds.
• We have a wealth of technical expertise in the delivery of European
programmes. The most effective ESF programmes in London (those co-funded
by London Councils and the GLA) are dominated by VCSE delivery.
• We have strong and trusted relationships with the most disadvantaged
communities in London. The greatest concentrations of charities are in inner
London boroughs with high levels of unemployment and economic inactivity such
as Camden, Hackney, Islington, Southwark and Lambeth. This gives the sector
access to community-level insight and intelligence on needs, and also on the
4. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 4
effectiveness or otherwise of a range of existing employment and skills
• We are well networked with stakeholders in EU programmes. VCSE providers
have working relationships with disadvantaged communities and families,
employers, housing providers, local authorities, colleges and training providers,
Jobcentre Plus offices, the criminal justice system, health services, CFOs, and
others. Successful providers support an essential on-the-ground link between
individuals, their communities, employers, and statutory and voluntary services.
They add value to these services, fill gaps, and identify duplication on a day-to-
• VCSE providers have unparalleled reach into disadvantaged communities
and an outstanding track record in working with equalities groups to ensure that
programme level equality targets are reached, cross cutting themes are
delivered, and CFOs’ obligations under the Equality Act and Social Value Act are
met. This expertise and these networks are vital if London is to close its overall
employment gap with the UK, because only by improving outcomes for BAME
communities, lone parents, disabled people, and other groups will the overall
London employment rate increase.
• VCSE provision maximises the social value of EU delivery through providers’
deep investment in London’s communities. The VCSE sector are leaders in
developing user-led, community asset-based and co-production approaches.
Organisations frequently employ former services users, and in many cases are
led by members of the communities they serve. Delivery by organisations with a
long standing presence in their neighbourhood ensures that investment often
• We lead the way in developing new approaches to tackle poverty and achieve
social justice by fighting discrimination and exclusion from the labour market,
making the case for early intervention to support the unemployed, and
campaigning for the London Living Wage.
• Many VCSE providers offer a range of services, from employment and skills,
crèche, debt advice, benefits advice, training, health support, volunteering, social
action, mentoring, family support, care etc. They invest intensively in the
individuals they support, recognising and realising their potential and taking a
holistic approach to addressing barriers to work. There is a wealth of evidence
that this approach produces the best results, particularly for the more
• VCSE providers have expertise in business support, particularly in social
business, micro enterprise, self-employment, and the low carbon economy. They,
5. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 5
therefore add social and environmental value at the same time as contributing to
• We are seen as trustworthy and independent by the public.
Case Study: HAFAD’s Project Search
Hammersmith & Fulham Action on Disability (HAFAD) is a charity which promotes
equality for disabled people. It is controlled by, and represents, disabled people living
and working in the borough. It provides high quality services and campaigns to
remove artificial barriers to developing opportunities, choice and independence.
HAFAD’s Project Search initiative was established with grant funding from Trust for
London, in partnership with GlaxoSmithKline and West Thames College. The first
intake of twelve young people with significant learning disabilities began the
programme in September 2012. They received nine months’ work experience
rotating through a variety of roles at GSK Global headquarters and nearby
businesses. An on-site HAFAD job coach gave them one-to-one support to find paid
employment, and they completed an accredited City & Guilds employability
programme delivered by the college. The ‘systematic instruction’ training method
was used to ensure that the participants achieved the quality standards expected in
the labour market.
Six out of the ten young people who completed the programme have now found paid
work, and HAFAD is confident of finding jobs for the remaining four. HAFAD expects
a 90% success rate for six months’ sustained employment, and 80% for twelve
months sustainment. By contrast, the UK employment rate for adults with learning
disability is just 7%, lower than for other disabled people. The disability employment
rate in London is lower than nationally, making these results with employers based in
the capital even more ground breaking.
Project Search is a highly innovative project developed by a user-led organisation,
creatively linking funding streams and stakeholders: mainstream skills funding,
independent trust funding, and corporate social responsibility. It has achieved
exceptional rates of employment and social inclusion outcomes for a client group
who do not receive adequate support from DWP programmes like the Work
Programme and Work Choice. Further, the project has engaged and influenced the
attitudes and behaviour of a high profile employer. There is clear potential to
replicate and scale up the programme to promote social inclusion and employment
opportunities for more young people.
6. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 6
VCSE recommendations for London 2014-2020
Below are our recommendations to the LEP, to ensure that London gets the best
possible social and economic return on the investment of European funds in 2014-
Articulate a vision of inclusive growth for London
We would like to see the LEP build on the vision and narrative in its Jobs and Growth
Plan and articulate a compelling vision for London of reducing inequality and
delivering inclusive growth through its European investment strategy.
The LEP has the opportunity to demonstrate genuine ownership of its responsibilities
for EU investment by:
• Increasing engagement with key stakeholders in EU programmes, including the
VCSE, and expanding membership to reflect this. There should be VCSE
representation on the LEP board and mechanisms for sub regional and borough
• Ensuring that London leads the country in taking a bold and innovative
approach to using European funds to address poverty, worklessness, and
inequality.by encouraging the setting of ambitious social targets in Operational
Programmes for ESF and ERDF.
• Reporting regularly on poverty and labour market equality indicators for
London, and setting targets for closing the gaps in employment and skills
outcomes between disadvantaged groups, and disadvantaged boroughs, and the
• Bringing together stakeholders to improve the coordination of commissioning
by different London CFOs, and between EU and mainstream programmes,
to reduce duplication (e.g, in relation to youth unemployment programmes and
workless families programmes). This would maximise the social and economic
return from statutory employment and skills programmes and bring together
stakeholders to develop a clear, agreed rationale for priorities for programme
design and delivery.
• Championing the principles of inclusion, diversity, and fair pay to providers,
employers, and commissioners by scrutinising the performance of mainstream
and EU programmes in reducing poverty and inequality in London. They should
ensure that all organisations represented on the LEP, and all London CFOs,
adopt the London Living Wage.
7. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 7
Funding and Commissioning
New approaches to commissioning in recent years (longer ,larger contracts, and
payment by results (PBR)) have had a dramatic impact in reducing the diversity of
the provider market, and have made it progressively more difficult for specialist
providers to participate in mainstream and European employment and skills
The LEP must now consider commissioning and procurement arrangements for EU
programmes that can be shaped to ensure best value for the public purse, without
compromising on the quality of delivery, or particular outcomes for disadvantaged
The LEP should:
• Ensure that a range of approaches are taken to commissioning and funding
to improve access for high quality providers. These should include:
o a mix of contract and grants of different sizes;
o payment by results contracts making greater use of intermediate steps and
milestones in programmes targeting disadvantaged groups;
o opportunities for direct bidding for providers who can bring their own match
o investigating new ways to match EU funds, including volunteer time and
o investigating options for community-led development on a pan-London
basis for particular minority communities of interest to create economies of
o reinstating a London-wide Community Grants programme with larger
• Ensure that funding models (including unit costs and outcome based payments)
reflect the true cost involved in supporting very disadvantaged clients to
make progress in London’s job market. Low unit costs can force providers to
work with 'easier' clients, reducing the effectiveness of programmes' work to
address inequality and disadvantage.
• Take a greater market stewardship role, supporting the development of VCSE
delivery partnerships and consortia, and support specialist providers to manage
PBR contracts e.g. through growing the social investment market.
• Support third sector technical assistance funds? to build the capacity of VCSE
providers to successfully participate in EU delivery.
8. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 8
• Commission research to explore how programme design, contract
management, eligibility rules, referral pathways, payment models, outcome
definitions, and commissioning practice all interact in shaping the behaviour of
providers. This research should consider factors such as advisor caseloads,
quality of support (including needs assessment and wrap-around services),
quality of employment outcomes (including pay), customer satisfaction and
performance against contract targets.
• Share the learning from this research in the form of best practice guidance to
commissioners in London to ensure that European programmes deliver high
quality provision to their clients at all levels of need. A shared understanding of
the costs of delivering high quality provision in London needs to be developed, so
that programme duplication and provider ‘creaming’ and ‘parking’ are minimised
and diversity and specialist expertise in the provider market is maintained. This
will result in a strategic London-wide approach to identifying need and designing
well targeted interventions that reduce poverty and inequality.
To make the biggest impact on poverty and inequality in London, EU investment in
• Ensure that well targeted programmes to support particular client groups facing
labour market disadvantage are commissioned. Key client groups in London must
include: parents including lone parents, deaf and disabled Londoners, ex-
offenders, and BAME Londoners, in particular young Black men.
• The LEP must consider how EU programmes can be used to mitigate the effect
of high living costs in London (childcare, housing and transport costs) as a
barrier to work; to improve access to quality careers information and advice; and
to increase the availability of quality part time and flexible jobs.
• Develop programmes that reverse the trend of growing in-work poverty, by
including skills support and careers information and advice for low paid workers,
particularly those most likely to move in and out of low paid jobs. Providers
should be paid for in-work progression outcomes when supporting the most
disadvantaged clients to make their support does not create cash flow problems
for the organisation.
• Use its position as an employer-led board to change employer behaviour. It
needs to develop initiatives to radically increase the uptake of the London Living
Wage, improve security and conditions for low paid workers; support employers
to develop more quality part time and flexible jobs: improve career progression
routes, especially for employees of SMEs and ‘dead end’ sectors (wholesale and
retail, hotel and restaurants); and challenge employers to reflect on the business
9. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 9
case for increasing the diversity of their own workforce to reflect that of London’s
• Deliver on the Mayor’s commitment to develop the market for part-time and
flexible vacancies at all levels. London has fewer part-time vacancies than other
regions, and part-time jobs in the capital tend to be lower paid that in the rest of
the UK. For many Londoners, fairly paid part-time work, especially in jobs that fit
around school hours, are the key to increasing household income and lifting
families out of poverty.
• Facilitate the development and dissemination of real-time local labour market
intelligence to improve the ability of employment and skills providers to give
people skills and work experience relevant to the current opportunities in their
area. This should include employer-led approaches that contribute to providers’
knowledge of employers’ future skills needs.
Policy Officer – Employment and Skills
London Voluntary Service Council
020 7832 5811
10. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 10
Appendix: London’s VCSE in numbers
What is the VCSE?
The voluntary, community, and social enterprise (VCSE) sector comprises a wide
range of non-profit organisations constituted for a social purpose. These
organisations are usually registered charities, social enterprises, or community
There is no good data for community groups in the UK. However, there is robust
data for the other kinds of VCSE organisations. The figures below relate to the
2008/09 financial year and are taken from research commissioned by LVSC from
Guidestar Data Services in February 2010. LVSC is currently updating this research.
Size and value of VCSE in London (excluding community groups), 2008-09
Number of organisations Total Income
Registered Charities 26,983 £16.3 billion
Companies Limited by
Guarantee1 14,922 £3.0 billion
Industrial and Provident
834 £252 million
358 £27.1 million
TOTAL 43,097 £19.6 billion
In addition, we have data on London’s charity workforce. Registered charities in
London employ 243,177 staff (equivalent to 112,380 full-time staff).
The total labour force in London in 2008/09 was 3,655,900, which means that 6.7%
of London’s paid workforce were employed in the VCSE in this period.
Typically charities employ a high proportion of workers from groups who face
disadvantage in the wider labour market, for example women, deaf and disabled
Many organisations are both Registered Charities and Companies Limited by Guarantee. These
organisations are only counted once here, as Registered Charities.
11. VCSE submission on London ESIF Strategy 2014-2020 (August 2013) 11
people, people from Black, Asian, and Minority Ethnic backgrounds, ex offenders,
and so on.
Charities are voluntary organisations which benefit the public in a way the law says
is charitable. Charitable organisations in England must register with the Charity
Commission if their income is over £5,000 a year.
Companies limited by guarantee are widely used legal structures for charities,
community projects, clubs, societies and other similar bodies. Most guarantee
companies are not-for-profit companies, that is, they do not distribute their profits to
their members but either retain them within the company or use them to promote
their purpose. Most such companies need their memorandum and articles of
association to be tailored to meet the objectives that particular organisation has been
established to address, and these, therefore, definess the main specialised work
they will be able to undertake.
An industrial and provident society is an organisation conducting an industry,
business or trade, either as a co-operative or for the benefit of the community,
registered with the Financial Services Authority under the Industrial and Provident
Societies Act 1965. Co-operative societies are run for the mutual benefit of their
members, with any surplus usually being ploughed back into the organisation to
provide better services and facilities. Societies run for the benefit of the community
provide services for people other than their members.
A Community Interest Company is a limited company, with special additional
features, created for the use of people who want to conduct a business or other
activity for community benefit, and not purely for private advantage.