The Local Growth Fund’s 70/30 capital-to-revenue split will severely reduce funding for employability, inclusion and community support programmes, despite NIAC reaffirming what the sector and wider stakeholders have repeatedly stated: tackling economic inactivity is central to economic growth.
The Committee is unequivocal: the UK Government must reverse this capital‑heavy model or urgently identify alternative revenue funding to protect essential services.
A Funding Model That Fails Northern Ireland
Under the new Local Growth Fund, Northern Ireland, from 1 April, faces a drastic collapse in the revenue funding that underpins vital community‑based employability, early intervention and wellbeing support.
The shift to 70% capital and just 30% revenue will result in:
- 11,000 people per year losing access to vital support
- Up to 400 highly skilled staff losing their jobs
- Dismantling of long‑established community infrastructure
- Rolling back decades of hard‑won progress on economic and social inclusion
This comes despite overwhelming evidence that tackling economic inactivity - one of Northern Ireland’s most persistent structural challenges depends on revenue‑funded, person‑centred interventions delivered by trusted voluntary and community organisations.
Currently, around 80% of current UK government investment delivered via the UK Shared Prosperity Fund (UKPSF) in NI supports revenue-based provision.
Reducing this to 30% from the 1 April diverts essential funding away from people and into capital projects, posing a profound threat to service continuity, labour‑market inclusion, and the progress made over decades.
As our sector has repeatedly stated and as this report makes clear - buildings do not support people into work. Skilled practitioners and programmes do.
No alternative provision currently exists at anything close to the scale required to replace what will be lost if these damaging cuts proceed without adequate mitigation.
NIAC Report Reinforces Sectors Calls
Speaking on the launch of the report, NIAC Chair Tonia Antoniazzi MP highlighted that “one of the keys to economic growth is tackling economic inactivity.”
Yet as the Committe highlights, the Local Growth Fund’s design fundamentally undermines the very services that make this possible, jeopardising employability pathways, community support networks and the skilled workforce who deliver them.
Progress depends on people‑focused, revenue‑funded support, rooted in local communities. Without it, Northern Ireland’s ability to reduce economic inactivity and the wider consequences linked to poverty, health inequality and long‑term unemployment will be severely compromised.
NIAC Chair Tonia Antoniazzi MP stated:
“We are frustrated that the Government is still not listening to the warnings from across the voluntary and community sectors about the impact the funding make‑up of the new Local Growth Fund will have on the ability to help people into and stay in work. It’s imperative that the UK Government recognises the clear need for current spending to fund employment support services and either reverses the 70/30 capital‑revenue split or support the sector to find the funds elsewhere.”
Less Than Seven Days Until Devastating Cuts Take Effect
With only days remaining before these cuts take effect, government failures to address the impending funding gap are wholly unacceptable.
Alongside the UK Government , the NI Executive also has a clear role and responsibility to help secure the future of these vital services.
These are local programmes that provide critical support to thousands of people each year, across our communities, including people with disabilities, women, carers, young people, and those with mental health needs. They meet local needs that require local solutions - they support individuals on the very edges of our labour market - those who face the greatest barriers and challenges.
They form a critical part of our public service infrastructure and have a central role to play in helping NI Departments meet their policy responsibilities including wider Programme for Government commitments.
Without continuity from 1 April, Northern Ireland will see:
- Vital employability and wellbeing services stop abruptly
- Skilled practitioners forced out of the sector
- Economic inactivity, already the highest in the UK, worsen
- Community infrastructure built over decades collapse with no quick route to rebuild it
- Increased pressure on already stretched public services
NICVA’s s #NICantWait Campaign continues to call for the protection of this vital infrastructure and continuity for frontline services and those they support.
Yet despite repeated warnings and government commitments to meaningful engagement, no workable transition plan has been secured.
Late stage direction by Government to look at alternative funding solutions outside of government investment have proven fruitless, only serving to distract from the crisis at hand. Even if alternative funding sources could be secured, this is months and months away and at no way near the scale required to meet current need.
An Urgent Bridging Arrangement Is Needed Now
Decisions taken by both the governments in the coming days will undoubtedly shape Northern Ireland’s long‑term social and economic trajectory.
The NIAC report reinforces what the sector has consistently outlined:
- Economic inactivity is a major barrier to local growth
- VCS‑delivered programmes are essential and effective
- The 70/30 capital‑revenue split is wholly unsuitable for Northern Ireland
Without an immediate resolution, services will begin to collapse.
It is not too late: the UK Government and NI Executive must work together now to protect this vital infrastructure, prevent extensive job losses, and sustain essential services while a long‑term funding solution is agreed.
There has been unanimous Executive and cross‑party agreement on the importance of these services. That consensus must now be matched by action.
Commitments from both Governments to work with the sector to co‑design future programmes beyond March 2027 currently ring hollow and will mean nothing if the current infrastructure is allowed to collapse now - there will simply be nothing left to build upon.
Continued failure to act is a political choice.
Northern Ireland Cannot Wait Any Longer
The clock has run down, as the report highlights, urgent intervention and action is needed now.
The decisions made now will determine whether Northern Ireland’s most vulnerable are supported into opportunity or left behind without the services they rely on.
Those who lose out will be the people already facing the greatest barriers - those with complex needs, limited access to support, and the least alternative options.
A solution is needed urgently and before the 31 March. Otherwise, it will simply be too late.
The NIAC report could not be clearer: without urgent change or alternative solutions, thousands will lose access to support, hundreds of jobs will be lost, and the consequences for individuals, families and the wider economy will be severe.
Northern Ireland cannot wait.
Our communities cannot wait.
We urge both Governments to act now.
