ESF reserves can help social housing drive economic recovery

Leveraging ESF reserve funds would help social landlords deliver critical employment support services, writes Lynsey Sweeney.
Lynsey Sweeney, managing director of Communities that Work. Credit: Communities that Work.

There is no question COVID-19 has been devastating to our economy, but data shows that that those who were financially vulnerable before the pandemic hit are being hit hard and falling further behind.

Communities that Work’s new report exploring the pandemic’s impact on housing sector-led employment support found that 94% of housing associations reported an increase in residents facing economic hardship. The report also found that housing associations saw increases in the number of residents on housing benefit as well as increases in demand for financial, employment and rent related support.

This widespread increase in economic hardship raises concern about how long and tough the road to recovery will be for social housing residents, with social mobility at risk of permanently stalling for many households.  

The report’s findings also raise significant questions about how housing providers and social landlords – who already face funding and resource constraints – can meet the rising demand for vital support brought on by COVID-19. It is well documented that the sector plays a vital role in helping social housing residents and communities access meaningful employment opportunities and progress in work. These sector-led support services are needed now more than ever as we aim to chart the course to recovery.

Leveraging European Social Fund (ESF) reserves in full and placing housing at the heart of the UK Shared Prosperity Fund pilots is one solution to these critical issues.  Communities that Work’s report found that the most common practical support need of housing associations was related to funding security and additional funding.

Funding certainty is a major concern for the sector, as many housing associations relied on  ESF to deliver crucial programmes and services. While ESF support to the UK has ended due to Brexit, millions of pounds in ESF reserve funds is sitting in UK government coffers and going unused because it needs to be match-funded.

Our report estimates that £76 million in community investment was provided by housing associations in the 2019-20 financial year, giving the sector the ability to match fund. Working with the Department for Work and Pensions to leverage ESF reserve funds would provide additional funding for the sector to deliver critical employment support services, helping meet the rising need for support in the communities we serve and drive economic recovery by creating and securing employment opportunities. This would also provide much needed funding certainty as the sector navigates transitioning from ESF reliance to utilising the UK Shared Prosperity Fund.

The new government budget set to be delivered by the chancellor next month is expected to set out an economic strategy that will support recovery and begin to address the deficit. The government should use this announcement to leverage ESF reserves and give the social housing sector greater funding certainty. Doing so will drive recovery without extra spending, as it uses existing funds to amplify the sector’s efficient and effective methods of helping people into work,  boosting local economies. This isn’t just good policy, it’s common sense.

Lynsey Sweeney is managing director of Communities that Work, the national voice of housing providers who support residents and communities into employment. Its members are social landlords who between them own and manage more than 1.3 million homes.

To learn more about Communities that Work and read the full report, please visit

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