UK Government delays in replacing EU funds costing job opportunities, according to Welsh Government

The UK Government's delays in replacing EU funds for Wales is leaving communities in the dark and costing job opportunities, the Welsh Government has said.

Speaking in the Senedd on Tuesday, the Economy Minister Vaughan Gething MS said that the UK-wide Community Renewal and Levelling Up funds, which are controlled by the UK Government are "denying Wales the vital investment needed to help create jobs" and amount to a "levelling down" for the country.

The Minister explained that under the Community Renewal Fund, Wales is expected to receive around £10 million from the UK Government.

If the UK had remained in the European Union, under the EU Structural funding, Wales would have received an average of £375 million a year for seven years from January 2021.

He also explained that under the UK-wide £4.8 billion Levelling Up Fund, a total of £800 million has been set aside for Scotland, Wales and Northern Ireland over four years.

Wales is expected to receive around £30 million this year which means every local authority in Wales will receive around £1.3 million.

Mr Gething is now urging the UK Government not to break long-standing commitments by restoring the funding in Wales.

He said: “In no way can the UK Government’s approach to post-Brexit funding be described as acceptable partnership working, let alone effective intergovernmental relations.

“This is disappointing given the Prime Minister’s commitments following the summit in June regarding more effective intergovernmental relations across the UK and the First Minister’s willingness to collaborate.

“The clear majority position in this Senedd should be noted by UK Ministers. Indeed, the people of Wales were offered a prospectus that endorsed the UK Government’s plans at this year’s Senedd elections but that did not win the support of the Welsh public. There is a clear majority for a made in Wales approach that respects devolution.

“Only six months remain of this financial year and the UK Government has still not announced any successful bids for the Community Renewal and Levelling Up funds. This is despite the promises made to announce bids in July.

"Partners are right to ask how projects are supposed to delivered by March as required. This is a delay that leaves communities in the dark and badly compromises what can be achieved for people and businesses in Wales.

“We also have real concerns about the threat of UK Government plans on the future scale of EU-funded schemes including Business Wales, the Development Bank and Apprenticeships.

“Our framework for investing replacement EU funds builds on years of partner engagement. It is based on evidence and agreement with clear priorities for Wales. This is what a Team Wales approach looks like.

“I have made clear to the new Secretary of State Michael Gove that we are open to meaningful discussions on how to best collaborate to make these funds a success for Wales.

"The UK Government has an opportunity to show it has listened and to end the era that says to Wales ‘You’ll get what you’re given’.”

A UK Government spokesperson said: "Levelling up is about spreading opportunity, boosting living standards and improving public services, which is why we’re investing a record £100bn in infrastructure projects this year as we build back better from the pandemic.

"The UK Shared Prosperity Fund will help to level up and create opportunity across the UK in places most in need. Funding will ramp up so that total domestic UK-wide funding will at least match EU receipts, reaching around £1.5 billion a year.

"In addition to this investment, to help the UK prepare for the introduction of the UK Shared Prosperity Fund, this government is providing £220m of funding in 2021-22 through the UK Community Renewal Fund.

"This Fund aims to support our communities to pilot programmes and new approaches and will invest in skills, community and place, local business, and supporting people into employment.

"Through the UK Community Renewal Fund, we want to work directly with local partners in each nation across the UK, putting people that know their places best front and centre in shaping decisions.

"The UK Community Renewal Fund will help inform the design of the UK Shared Prosperity Fund through funding of one-year pilots, but the Funds are distinct in regard to design, eligibility and duration."

Adrian's Analysis:

On the face of it this might seem a slightly technical argument about different pots of money and it can be difficult to see why there’s such passion on both sides of the divide over it. 

It’s certainly about money and no politician of any party wants to be seen to accept a reduction in the money available. 

It’s true too that there’s still an element of the Brexit wars playing out here, with the anti-Brexiteers determined to ensure promises are kept and the pro-Brexiteers equally determined to show how taking back control has given Britain chance to transform the way things are done. 

But mostly, this is about power. It’s about who gets to make the decisions over what’s done in Wales. 

The UK Government is right to say that under the previous scheme the EU set the rules with little chance for UK politicians to influence those rules. Now, say ministers, the rules will be set closer to home and Welsh MPs get to have their say. 

But in practice, once the EU handed over the money there was little interference and it was certainly the Welsh Government which decided how those funds were divvied up. 

So the Welsh Government and other critics are also right to say that the proposals will take power away from Welsh ministers. 

From ministers, maybe, goes the counter argument, but not from Welsh people. Welsh MPs, local authorities and those delivering the services will have a much bigger say. 

Whichever view you take of them, it’s undeniable that the changes will result in less of a role for the Welsh Government in spending on projects in Wales. 

And it’s all part of a bigger argument over the future of the union of the United Kingdom. 

This current UK Government is taking a much more robust approach to devolved matters, squaring up to fights with Welsh and Scottish Governments on a regular basis. 

The calculation of ministers in London is that voters don’t care who makes decisions as long as improvements happen but that’s also a gamble that could see more people pushed into considering or even supporting independence.