The Welsh Government has refused to offer technical support when the UK Government starts allocating former EU funds in Wales. This is part of a long-running dispute between Mark Drakeford's Cardiff Bay administration and the Boris Johnson-led UK Government. Though this can get a bit complex it will have a real impact on Wales and the people living here so it is worth understanding what exactly is going on.
Wales used to receive huge amount of money from the EU before Brexit. That funding is often very long term so, despite leaving, Wales has still be receiving EU funds. However that is now wrapping up.
As part of their 2019 general election campaign the Conservatives promised that Wales would receive "not a penny less" as a result of Brexit. Many people took this to mean that the Welsh Government would have a role in allocating this money (as they have done for 22 years as part of the EU). However the UK Government has now confirmed that it will allocate these funds through its new Shared Prosperity Fund (SPF).
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In response to this the Welsh Government economy minister Vaughan Gething wrote to the UK Government. Following this letter he said: "I shared our disappointment that the Welsh Government had only two weeks of genuine discussion on the matter despite us trying to engage with the UK Government over several years to share views on a model developed with Welsh partners and the OECD on how replacement EU funds should be spent in Wales
"During this short window whilst we found some common ground, such as the importance of local authorities aligning investment plans with our framework for regional investment in Wales, we could not agree, ultimately, on the following:
- "The UK Government’s failure to honour repeated pledges to replace, in full, EU funds for Wales, meaning an overall shortfall of more than £1.1bn (accounting for the loss of structural and rural funding, and inflation) by March 2025;
- "The UK Government’s use of the UK Internal Market Act to forcibly take decisions in devolved areas and exclude the Welsh Government from a transparent process of joint decision making for the SPF while bypassing the scrutiny of the Senedd;
- "The prospectus’ methodology for financial allocations to Wales, which distributes money away from those areas where poverty is most concentrated."
He followed this up by saying: "I have therefore confirmed in writing to the UK Government that the Welsh Government is unable to endorse the approach the UK Government is taking on the SPF. This means, as we have consistently stated to the UK Government, that the Welsh Government will not deploy our own resources to implement UK Government programmes in Wales which we consider to be flawed and undermining of the devolution settlement."
So what does 'will not deploy our own resources to implement UK Government programmes' actually mean?
The Welsh Government has been responsible for assessing the merits of projects in Wales that could potentially receive EU money for more than two decades. This means they have experienced teams of people who the Welsh Government say are well-placed to know what is needed in particular parts of Wales. The Welsh Government say that them having control of this money minimises duplication of projects than would be the case with both the Welsh and UK Government's giving out money.
Under the SPF individual councils will be able to apply for funding and will often be competing with each other. The UK Government are currently in the process of hiring civil servants to assess the merits of these applications and want the Welsh Government to use their existing pool of experienced staff to assist. This is what the Welsh Government are refusing to do when they say they "will not deploy their own resources".
How has it come to this?
The Welsh Government have been trying to get clarity on this for the last two years. A Welsh Government source indicated that they had written consistently to the Department for Levelling Up, Housing, and Communities (DLUHC) in the UK Government who are dealing the SPF but many of their letters "have gone unanswered". Mr Gething did stress in his statement that there had been cooperation between the two administrations on issues such as free ports.
What did the UK Government say?
When WalesOnline approached the UK Government about the Welsh Governments comments a DLUHC spokesman said: “Our UK Shared Prosperity Fund (UKSPF) matches previous EU funding in Wales – it gives local people control of how UK money is spent, removes unnecessary bureaucracy, and enables local communities to invest in the priorities that matter to them.
“We have designed the fund so it gives local people direct control of the money and have allocated funding to councils throughout Wales ensuring places with greater need will receive the finding they need. The UK Government is not delivering the UKSPF in Wales. The fund will be delivered by local councils, working closely with local partners, and planning is well under way. We regularly engage with our Welsh Government counterparts to support delivery of the fund.” They also added that they would be responding to the Welsh Government's letter in due course.
