To a large extent, the UK’s regional policy over the last few decades has been shaped and driven by the European Union, and substantial funding has transformed some of our most deprived communities. Over 200,000 people have benefitted from training thanks to EU funding and more than £2 billion will be funnelled into poor areas between 2014 and 2020. But the fact is, we all know that problems in these communities are unlikely to be overcome entirely by 2020 and there will therefore need to be continued substantial support.

This morning in Finance Committee we learnt that economic development spending at the local government level has reduced 66 per cent over the past six years, and cuts to planning in local authorities have meant a 45 per cent reduction. Both are key areas where we hope and expect wealth generation to come from. We’ve been able to bear these cuts to an extent because of the fact that we have these various EU funding pots, but beyond 2020 there are absolutely no guarantees.

Now, the Welsh Government suggested in its White Paper that they’d like to see a one-off adjustment to the block grant to make up for European funding losses to Wales. Whilst this, in principle, was something that should be considered, we in the committee were concerned, I think, that this approach may pose risks in the longer term and that there is a need to futureproof any adjustments to the block grant made at this point so that we don’t lose out in the longer term.

We published this report in June, which was too late for us to consider the proposals made in the Conservative Party manifesto in May for the establishment of a shared prosperity fund, which would be, they suggested, established for the whole of the UK. I note in the Minister’s response to our report the rejection of such an approach. But if that’s what the UK Tory Government’s intention is, it would be useful to know if the Cabinet Secretary will simply not engage with this discussion, in which case there’s a risk that Wales will be presented with a fait accompli that we will not have influenced, or whether the Minister has had any discussions on this proposal, whether the idea proposed by the UK Government is based on an objective needs-based formula, and whether this is a proposal that will have to be approved and agreed by all of the nations in the UK, as we suggested in our report.

I think we’d be concerned that, if the Welsh Government does not have to approve the shared prosperity fund criteria, then the criteria may not be drawn up in a way that would benefit Wales. Our unemployment figures, for example, are relatively low compared to many other regions in the UK, but our gross domestic product in some areas lags significantly behind. So, to what extent are you going to engage in that shared prosperity discussion?

One of the great advantages of the European structural funds is that they allow the Welsh Government, public authorities and other interested parties to plan on a multi-annual basis. The committee was very keen to ensure that this should also feature in any future regional model of economic development. I think it is worth re-emphasising the point that other members of the committee have said, including Steffan, about the fact that actually we were quite disappointed with the lack of imagination and creativity, this desire for more of the same, from a lot of people who are currently benefitting from European regional funds. I do think we’re going to have to think very radically and in a new way in terms of how we engage with regional developments in future.

I’d also like to highlight the fact that we received evidence from many witnesses who agreed that, whilst the Welsh Government should have its hand on the tiller in relation to regional policy, it’s imperative that sub-regional structures in Wales are established. The area I’m specifically concerned about is the need to develop a sub-regional rural area of economic development, which will not be imposed from Cardiff, but will respond to the unique needs of rural communities. I’m delighted to say, once again, that the WLGA confirmed at its rural meeting on Friday that they will now proceed to develop a sub- regional place-based plan for economic development in rural Wales. I’m glad that the Welsh Government has agreed to this particular recommendation in the report, but I do hope that the Welsh Government will engage actively with this new local government grouping to live up to its promise, made here, to ensure that rural priorities are given sufficient emphasis in the design of regional policy.

I’d just finally like to thank the Cabinet Secretary for agreeing to all of the recommendations in this report; that’s the kind of engagement that we like to see. But we will take an active interest and follow up to make sure that the Welsh Government does indeed follow through on their promises.