Union modernisation fund up and running

In July 2005, the UK government launched the Union Modernisation Fund - a new grant scheme to provide financial assistance to trade unions to support projects designed to improve their organisational effectiveness.

On 15 July 2005, the Department of Trade and Industry (DTI) issued the first call for applications to the Union Modernisation Fund (UMF) - a new government grant scheme for trade unions which has been established under the Employment Relations Act 2004. The purpose of the UMF is to provide financial assistance to independent trade unions and their federations in support of 'innovative projects which speed unions’ adaptation to a changing labour market and new ways of working'. This is intended to 'enhance unions’ ability to make a full and effective contribution to constructive employment relations and to the economy as a whole'. The deadline for applications is 3 October 2005.

Under the fund, GBP 5-10 million will be available, over a number of years, to support innovative projects including:

  • training union representatives, in areas such as business and people management, to help promote the development of high performance workplaces;
  • reviewing internal union structures and organisation and to support more efficient management systems within unions; and
  • enabling unions to broaden their dialogue with members by greater use of the internet and other new technologies.

Unions will normally be expected to provide 50% of total project costs through matched funding.

The UMF cannot be used for the day-to-day work of unions, supporting recruitment drives, advancing a union’s position in collective bargaining or industrial disputes, or representing individuals in disputes with employers.

Proposals for the establishment of the UMF were first announced in Parliament in February 2004 by Gerry Sutcliffe MP, the employment relations minister (UK0403104N). The legislative basis for the establishment of the fund was subsequently provided by section 55 of the Employment Relations Act 2004 (UK0411101N). The creation of the fund was vigorously opposed by employers and by Conservative and Liberal Democrat members of Parliament as being politically motivated and open to abuse. The Confederation of British Industry has argued that 'There is a risk that this fund will be viewed by many as nothing more than special treatment for a lobby group', and has pressed strongly for regulatory safeguards on the use of the fund.

The DTI undertook informal consultations with key stakeholders over the summer and autumn of 2004 about the operation of the UMF. It subsequently published draft scheme rules for full public consultation in December 2004. In May 2005, the government published its response to the consultation which set out the final rules and procedures of the fund.

An independent Supervisory Board will consider all bids and recommend to ministers those projects it considers should be supported. The Supervisory Board will consist of seven members, selected through open competition, with a range of relevant experience, including a chair with experience of working in a trade union.

Commentating on the launch of the UMF, the general secretary of the Trades Union Congress, Brendan Barber, said: 'This is a welcome initiative by government that recognises the importance of unions to the modern world of work. But it is also an increasingly complex world and this fund will help unions develop their capacity to service their members, deal effectively with employers and contribute to building a successful economy. No doubt some will attack it, but it is small beer compared to the help for business that the DTI already rightly provides.'

This information is made available through the European Industrial Relations Observatory (EIRO), as a service to users of the EIROnline database. EIRO is a project of the European Foundation for the Improvement of Living and Working Conditions. However, this information has been neither edited nor approved by the Foundation, which means that it is not responsible for its content and accuracy. This is the responsibility of the EIRO national centre that originated/provided the information. For details see the "About this record" information in this record.

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