A bitter row over regional aid for Wales has intensified after the UK Government released its long-awaited blueprint on replacing funds from the European Union. Ministers at Westminster claim their hared Prosperity Fund (SPF) will match the money Wales would have received from the EU.
But the Welsh Government accused its UK counterpart of misrepresenting the true position, claiming the UK Government was including in its figures money that would have come to Wales anyway if we had remained in the EU. A statement issued by the UK’s Department for Levelling Up, Communities and Housing said communities in Wales would benefit from £585m of funding “to help spread opportunity and level up the country”.
It claimed that the SPF would see places in Wales that need it most draw up plans this year to deliver on their local priorities, based on a conditional allocation of funding over the next three years. This could, said the statement, include regenerating rundown high streets, fighting anti-social behaviour and crime, or helping more people into decent jobs – helping to revive communities, tackle economic decline and reverse geographical disparities in Wales and across the UK.
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According to the statement, the funding delivers on the UK Government’s commitment to match the previous EU funding from the European Social Fund and European Regional Development Fund. However, it claimed that the fund would be “much more flexible and locally led, freeing communities in Wales from the bureaucratic, rigid and complex processes of the EU Structural Funds”.
The statement added: “Bureaucracy will be slashed, and there will be far more discretion over what money is spent on. EU requirements for match funding, which impacted on poorer places, will be abolished. Instead of regional agencies, funding decisions will be made by elected leaders in local government, with input from local MPs and local businesses and voluntary groups.”
It said the new fund also included more than £101m for Wales for an adult numeracy programme, Multiply, which will support people with no or low-level maths skills get back into work. The scheme will offer free personal tutoring, digital training, and flexible courses to improve adults’ confidence and numeracy skills.
The SPF is in addition to other levelling up funding for Wales, including the Community Ownership Fund and the Levelling Up Fund, which has already invested £121m into Wales, and £790m for city and growth deals.
Secretary of State for Levelling Up Michael Gove said: “We have taken back control of our money from the EU and we are empowering those who know their communities in Wales best to deliver on their priorities. The UK SPF will help to unleash the creativity and talent of communities that have for too long been overlooked and undervalued. By allocating more than half a billion pounds for communities up and down Wales, we will help to spread opportunity, increase prosperity and level up every corner of the UK.”
Secretary of State for Wales Simon Hart said: “This is a huge boost for people across Wales, who will now have access to this fund to level up their communities and make decisions about where they want to see the money spent. The SPF will bind together the whole of the UK, while tackling inequality and deprivation across all four nations.
“I’m sure that the proposals for spending the fund will lead to substantive improvements to people’s lives in Wales, especially in areas where there is the greatest need. People in every nation and region want to see politicians acting together on the common challenges we all face and I look forward to working closely with the Welsh Government.”
Funding for the SPF across the UK will be £2.6bn between 2022 and 2025, with this figure reaching £1.5bn per year by March 2025. According to the UK Government it will deliver on its commitment to match the average spending of EU structural funds over the previous programme.
The statement said: “Previous EU programmes ramped up and down, and areas will continue to receive EU funding until the end of 2024. Similarly, UK SPF will be increased from £400m in 2022/23 to £1.5bn in 2024/25, at which point it will match the EU funds it has replaced."
But the figures were disputed by the Welsh Government, which contrasted the £585m over three years that Wales will be receiving with the £375m per year it has been getting from the EU. Equally, the city and growth deals would have come to Wales if the UK had remained in the EU.
A Welsh Government spokesman said: “Despite the manifesto promises made by the UK Government, post-EU funds leave Wales with less say over less money. It remains the case that Wales will lose more than £1bn that could have been used to grow the economy and support some of our most disadvantaged communities.
“The Welsh Government has consistently called for a joint approach. In recent weeks, we have engaged in intensive talks with the UK Government to try and secure a pragmatic way forward. “Although there has been some movement, the funding plans set out today simply do not reflect the needs of Welsh communities. “We are concerned that far too little will reach those communities most in need.
“The Welsh Government suggested an alternative formula which would distribute funding more fairly across Wales according to economic need, but this was rejected by the UK Government. The result of this is that funding has been moved away from our most disadvantaged communities.
“We will now work with local government partners and stakeholders to maximise the opportunities that exist for programmes that will support our mission to create a stronger, fairer and greener Wales.”
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