Third sector organisations and business groups across Glasgow have started issuing 90-day redundancy notices to staff as a result of “devastating cuts” in UK Government funding.
Hundreds of jobs are thought to be at risk.
In a bitter irony, many of them will be in programmes linked to employability, meaning that workers who have spent years helping others find work will now find themselves unemployed.
Organisations were aware that the UK Shared Prosperity Fund (UKSPF) — introduced by the Tories after Brexit to replace EU structural funds — was due to end on March 31.
However, there was an expectation that its replacement, Labour’s new Local Growth Fund (LGF), would be funded at a similar level.
On Thursday, Scottish Secretary Douglas Alexander announced that the UK Government would invest £140 million in five Scottish regions through the LGF to support economic growth, with Edinburgh set to receive £37.8m, Tay Cities £19.5m, Ayrshire £11.8m and Forth Valley £9.8m.
Glasgow City Region will receive £60.9m over three years — a reduction of around a third compared with the £91m delivered through UKSPF over the previous three-year period.
Crucially, only around 30% of the new fund can be spent on revenue — the day-to-day funding used to pay staff and deliver services.
The rest is now earmarked for capital projects.
Glasgow City Council says that by the third year of the programme, the entire revenue allocation for the eight local authorities that make up the city region will fall to around £4.9m, down from £23m this year.
An assessment by the Industrial Communities Alliance (ICA) said this shift, combined with a reduction in overall funding in all but one Scottish region, “takes a sledgehammer” to existing employability, business support and training programmes that are labour-intensive and cannot be sustained through short-term capital grants.
The ICA states that there are “major knock-on consequences for jobs”.
“Based on data for a sample of local authorities, the ICA National Secretariat estimates that on average every £1m of UKSPF spending directly supports seven jobs in local authorities plus additional jobs in third sector organisations delivering UKSPF-funded services.
“On that basis: around 530 jobs in Scottish local authorities are presently directly supported by UKSPF funding.
“The 50% reduction in funding for Scotland’s Local Growth Fund by 2028-29 and the shift to capital spending puts more than half these jobs at risk, beginning in April this year.”
Susan Aitken, the leader of Glasgow City Council, has written to Mr Alexander warning that “there are devastating cuts coming" unless the UK Government "intends to provide replacement revenue funding”.
She added: “The delay in the announcement [of the LGF allocation] means that we are already into the 90-day notice period for staff who are employed in organisations currently funded through SPF and now facing a massive cut.”
The funding supported a wide range of activity across Glasgow. The council said that this included 17 third sector organisations delivering community programmes that helped safeguard almost 200 jobs, grants to around 500 businesses, and advice delivered through the Glasgow Business Growth Framework.
They added that employability programmes backed by UKSPF engaged more than 5,500 people, with more than 2,100 progressing into work, 2,400 gaining new qualifications or skills, and more than 2,500 entering education or training.
Financial support also enabled employers to create more than 260 new jobs.
Many of the scheme funded by SPF were directed towards those "furthest away from the labour market", including young people, those with disabilities and BAME groups.
Third-sector organisations in Glasgow that have previously secured revenue funding through the fund include the Centre for Contemporary Arts, Bike For Good, Glasgow Clyde Rape Crisis, Castlemilk Youth Complex and the GalGael Trust.
In her letter, Cllr Aitken asked if it was the UK Government’s intention “to replace programmes to tackle unemployment, low skills and poverty with, for example, capital funding for the public realm”.
“If that is the case, then there must be clarity about the reasons for that, what is expected to be achieved and honesty about what will be lost.
“The UK Government’s press announcements for the LGF refer to programmes for business support and skills development as well as infrastructure, but the reality is that existing programmes in these areas will be greatly reduced.”
A Scottish Labour spokesperson said: “The blame for Scotland’s local government funding crises lies firmly at the SNP-led Scottish Government’s door. Susan Aitken should be asking John Swinney why the SNP-led Scottish Government has over decades centralised powers while cutting funding levels for Scottish local government.
“It is simply wrong to suggest that the UK Government is cutting funding for the Glasgow City Region. Taken together our package of four new local growth programmes will invest up to £103m in Glasgow City Region over the next three years, this is up to £15m more than under the UKSPF levels in 2025/26.
“On top of this the UK Government is also investing hundreds of millions into the region through the Investment Zone, local regeneration, and innovation partnership programmes.
“Thanks to increased direct funding for local authorities in England the Scottish Government will receive an additional £163m over the next three years. Yet since 2013 the SNP have made £7.8 billion of cuts to core local government funding. The question for the First Minister is ‘Where’s the money gone John?’
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