1. What assessment has the Welsh Government made of the shared prosperity fund's potential to address economic inequality in Wales? OQ57939

Llywydd, the fund fails to address economic inequality because of a series of fundamental flaws. It breaks a key Conservative promise that Wales would not be a penny worse off. It allocates its reduced amounts through a formula that deliberately under-represents concentrated inequality and it removes decision making from Wales to Whitehall.

I thank you, First Minister, for that answer. Under the recently released and long-awaited details of the shared prosperity fund, it is clear that Wales is set to lose more than £1 billion over the next three years. Funding will also be top-sliced to support the delivery of UK Government pet projects, and there will be duplication of existing provision within Wales. What is the Welsh Government's assessment of the impact of this duplication, and do you consider that this approach will mean that deep-seated economic inequalities aren't addressed?

Well, Llywydd, Vikki Howells makes an important supplementary point about the way in which the reduced amounts that will come to Wales are, in any case, being top-sliced by the UK Government for its own projects, which it will seek to run here in Wales. So, the Multiply programme will be the most obvious example of that—over £100 million that should be in the hands of Welsh decision-makers instead being decided by UK Government Ministers in Wales. The Multiply programme—let me explain to the leader of the opposition—the Multiply programme is not in the hands of local government leaders at all. It is a scheme devised by the UK Government; made in Whitehall; no reference to Wales whatsoever; not a single sentence from any UK Minister before it was announced; no sense at all that it understands the Welsh context in which it will seek to operate. If you look at the menu of choices that local authorities are said to have to operate within, they are entirely—entirely—Anglocentric. They reflect only the landscape that there is in Wales. Not a singe reference to the adult learning network here in Wales, not a single reference to further education provision in Wales, not a single reference to the Hwb platform, which provides the majority of resources that will be necessary for any effective programme here in Wales. The objection, Llywydd, is not, of course, to money being spent in numeracy; it is money being ineffectively spent, money that will now risk duplication of provision here in Wales, that will be spent in ways that bear no relationship to the context in which it is being spent, and which will, I'm afraid, simply mean that that money, which could have been used much more effectively, could have been used in ways that work with the grain of the landscape here in Wales instead of entirely ignoring it, will simply not deliver the outcomes that it would have delivered had it been spent in ways that respected the devolution settlement and respected the way in which decisions ought to be made here in Wales. 

First Minister, as you are aware, the Finance Committee of the Senedd will be looking at the shared prosperity fund, and, as Chair of the Economy, Trade and Rural Affairs Committee, I want to make it clear that my committee will also be investigating these new funding arrangements and the impact of the arrangements on Wales, once the Finance Committee has reported on this issue. Now, you and your colleagues have stated clearly that you believe that Wales is £1 billion worse off as a result of these recent announcements. So, can you tell us how the Welsh Government has reached that figure of £1 billion, and will you publish an analysis and breakdown of how you've worked out that figure?

Well, of course, Llywydd, we are happy to explain how we've got to those figures, and we are happy to publish the figures too, because they are clear—they are clear—and there is no doubt whatsoever about these figures. We will lose £0.75 billion because of the system used by the UK Government to replace the structural funds. And we will lose £243 million from the funds that would have come to Wales from European Union programmes in the rural sphere too. So, we have the figures, we have that analysis and we're happy to publish it just to demonstrate what the UK Government have done in cutting the funding and what they said here, on the floor of the Assembly, which was an—

—absolute guarantee that Wales would not be a penny worse off. Well, £1 billion is not the whole of it, Llywydd; it's just part of the way that we will be losing out.

It's good old-fashioned pork-barrel politics, isn't it? We heard recently that Ynys Môn would be getting some £16 million from the so-called shared prosperity funds. And whilst any funding is to be welcomed, of course—and I'll work with partners to make sure that projects on Anglesey will benefit as best as possible—there's no escaping the fact that this is a fraction of the funding available under EU structural funds, and falls way short of the UK Government's promise that we wouldn't lose a penny after Brexit, which the Conservatives clearly don't mind one bit. Now, it's a mess, but my question relates to the fact that this is an unstrategic mess. Does the First Minister agree that there's no joined-up thinking here from UK Government, no long-term plan? And can he tell me what pressure Welsh Ministers can try to bring to bear on their UK counterparts to try to make subsequent funding rounds at least a little bit more strategic in nature?

Llywydd, I agree entirely with what the Member said. This was a fund announced in 2017, in a Conservative Party manifesto. It took until the start of this month—April 2022—before we've had any substantive discussions with UK Ministers about the way in which they intend those funds to be used in Wales. And all of that compressed into two weeks because of their determination to rush out an announcement in advance of local government elections, for exactly the sorts of purposes that Rhun ap Iorwerth has identified. Now, in those two weeks, we were able to secure some concessions from the UK Government, so that at least the way in which funds will be used in Wales will reflect the regional footprints that we've used for other UK and Welsh Government joint initiatives in Wales—the city deal footprints. And we've secured some agreements about how a wider set of interests can be brought round the table to help determine how bids can be made in Wales. Let's be clear, there are no decisions being made in Wales. Local authorities are invited to put together proposals, which will end up on the desk of a Whitehall Minister and they will make the decisions.

We had a series of discussions, Llywydd, with UK Ministers about the formula to be used for the distribution of these funds. Just on the point that Rhun ap Iorwerth began with, the formula that the Welsh Government proposed would have led to more money being spent in Bridgend, for example, or the Vale of Glamorgan, for example, both of which have Conservative Members of Parliament. So, the formula that we proposed was not a partisan one; it was one that sought to align funding with where need is greatest. We weren't able to persuade the UK Government of that—they have other objects in mind—and the result is that, as Rhun ap Iorwerth said, we will have a series of rushed bids. Local authorities have to put everything together—the whole process. They have to go out for bids, they have to assess those bids, they have to demonstrate the outputs that they will achieve, they have to demonstrate the governance arrangements that will be in place, they have to demonstrate how they will be able to consult, and all of that before 1 August. The chances that there will be coherence in that funding, the chances that that funding will be used to the best possible effect—. It's not just that we're getting less money, it's being less well spent. I think that's the fundamental objection to it.