UK Government Shared Prosperity Fund will leave Wales 'worse off'

The fund, announced on Wednesday, is designed to replace money previously allocated to communities by the EU.

According to Welsh Government estimates, Wales would have received around £375 million per year through EU funding grants if the UK had remained a member.

Westminster's replacement scheme, the Shared Prosperity Fund (SPF), will instead provide Wales with £585 million spread over the next three years, amounting to around £195 million per year.

But council committees, rather than the Welsh Government, will take the lead in seeking funding.

However some of the money will be earmarked for Multiply, a new UK Government adult numeracy programme, designed to "support people with no or low-level maths skills get back into work".

The SPF will only begin to match EU funding levels from the end of 2024.

Decisions about where the money will be spent will be put in the hands of councils, MPs and local businesses, the UK Government said, seemingly bypassing the devolved governments of Wales, Scotland and Northern Ireland.

Levelling Up Minister Michael Gove said: "We have taken back control of our money from the EU and we are empowering those who know their communities best to deliver on their priorities.

"The UK Shared Prosperity Fund will help to unleash the creativity and talent of communities that have for too long been overlooked and undervalued.

Despite repeated promises, the UK Government's announcement today leaves Wales with less say over less money.

We'll lose over £1bn that could have been used to grow the economy and support our most disadvantaged communities.

This is not levelling up, it’s levelling down.

— Mark Drakeford (@PrifWeinidog) April 13, 2022

"By targeting this funding at areas of the country that need it the most, we will help spread opportunity and level up in every part of the United Kingdom."

First minister Mark Drakeford, however, said that the move left Wales with "less say over less money".

"We'll lose over £1 billion that could have been used to grow the economy and support our most disadvantaged communities," he added in a tweet on Wednesday.

"This is not levelling up, it’s levelling down."

Wales previously had control over how EU funding was allocated but the new fund is clear that the UK Government will hold the purse strings.

Its prospectus for the fund states: "Recognising that levelling up is a programme for the whole of the United Kingdom, the UKSPF will be delivered UK-wide, using our powers in the UK Internal Market Act. It is a priority of the Fund to deliver effective investment to all parts of the UK, to maximise benefits for citizens and the economy."

The prospectus said it recognises those goals are shared by the devolved administrations but reaction today shows there is little consensus between Westminster and the other governments on how the fund is allocated.

MPs are also given a greater role in the local planning of fundings than their counterparts from the Senedd, the Scottish Parliament and Northern Ireland Assembly.

According to the prospectus: "Members of the UK Parliament play an important role in representing the views of their constituents, working collaboratively with local authorities and other local partners to work for the good of local places. They should be closely engaged in the design and delivery of the Fund. In most cases, all MPs in the area should be invited to join the local partnership group."

But on the role of members of the devolved parliaments it only says: "Members of the Scottish Parliament, Members of the Senedd and Members of the Northern Ireland Assembly should also be engaged where relevant."

MPs are expected to be included in signing off plans and updated regularly as they are progressed.

There are also a set of Wales specific 'interventions' agreed and that "places are strongly encouraged to consider alignment with relevant Welsh Government strategies and services".

Today's announcement came as "stark" official figures suggested that nearly 200,000 Welsh households were experiencing fuel poverty in October 2021, with a further 153,000 households at risk.

It's feared that the recent 54 per cent energy bill hike means that the worst is yet to come.

Economy Minister Vaughan Gething (Picture: Huw Evams Agency)

In a statement, economy minister Vaughan Gething said that the Welsh Government had "made frequent attempts to engage with UK Ministers" as they developed the Shared Prosperity Fund, but hadn't been given the chance to meaningfully negotiate with Westminster until this month - and only then because the UK Government wished to announce the programme in time for the local government pre-election period.

"The Welsh Government proposed an alternative formula which would distribute funding more fairly across Wales according to economic need, but this was rejected by the UK Government," Mr Gething added.

"The proposed role of the Welsh Government also falls short of a genuine shared decision-making function essential to maximising investment and respecting devolution in Wales."

Liz Saville Roberts MP, Plaid Cymru's leader in Westminster, agreed.

"Just like decisions about Wales should be made in Wales, funding allocated to Wales should be spent by the government of Wales – not by Westminster and its out-of-touch Tory Ministers," she said.

“The Tories promised in 2019 to replace EU cash with a programme that was ‘fairer’ and better tailored to Wales’ economy. They have broken that promise.

“Already below what was promised and failing to even match EU funding, this so-called Shared Prosperity Fund will leave Wales and our communities £1 billion worse off.

“The Westminster Government has also resisted increasing regional support in line with the unprecedented inflation they are overseeing - which is exacerbating the cost-of-living crisis and squeezing household budgets, as well as those of our local authorities and the Welsh Government.

“And where EU funding to Wales was allocated to communities by our government according to need, this post-EU regional funding regime depends on the ‘input’ of and advocacy by MPs at a time when the Westminster Government is cutting the number of Welsh MPs by a fifth.

“By dividing Wales into 22 separate economic regions, reducing the number of MPs, and cutting corners with funding, Westminster is setting the scheme up to fail.

“This is another bitter reminder that Westminster will never work for Wales."

Plans to redraw the boundaries of electoral constituencies in Wales will indeed leave us with fewer MPs - 32, down from 40.