4. What discussions has the Welsh Government had with the UK Government regarding the shared prosperity fund? OQ57938

Llywydd, the shared prosperity fund was announced in 2017, but meaningful discussions with the UK Government opened only at the start of this month. It remains the Welsh Government's position that we cannot endorse an approach that removes both funding and decision making from Wales.

Thank you, First Minister. Obviously, you've already said that Wales could lose out by over £1 billion as a consequence of the implementation of the shared prosperity fund. That's £1 billion that could have been used to grow the Welsh economy and to support some of the most disadvantaged communities in Wales, including in my constituency. It doesn't feel like levelling up. Is this, therefore, another example of EU funding not being replaced in full, and yet another example of the UK Government breaking its promise that Wales will not be a penny worse off after Brexit? 

Llywydd, I promised earlier that I'd assist Paul Davies further with figures that demonstrate the extent to which Wales has lost out as a result of the decisions made by his Government. I'll give him a preview of it now. Last year, the shortfall between what we would have received had we remained in the European Union and what we got from the UK Government was £328 million. It's £286 million in the current financial year, it'll be £222 million in the following financial year, and it'll be £32 million in 2024-25 when the UK Government claims that it will have got the shared prosperity fund to its maximum. That doesn't include, of course, the top-slicing of that money, the £101 million that will be taken away for the UK Government's Multiply scheme, and it doesn't include the £243 million that we will lose in rural funding. Nor does it include, Llywydd, all the other schemes that citizens of Wales were previously able to participate in and which will be denied to them in the future. So, it doesn’t include what we will lose because the Erasmus+ programme was not replaced by the UK Government to the extent that Erasmus+ operated in Wales; it doesn't include the money that will be lost to Welsh higher education institutions, because participation in the Horizon programme has not been secured; and it doesn't include the fact that we will lose the €100 million that Wales had at our disposal when we had an interterritorial co-operation programme with the Republic of Ireland, a programme that was particularly useful in Paul Davies's own constituency. We won't have that either, yet another part that we were promised would be replaced. We weren't, you remember, to be a penny worse off. Well, that's €100 million on that programme alone that people in Wales will not have at their disposal, which demonstrates exactly the truth of what Ken Skates said in his supplementary question.

Good afternoon, First Minister. Local government has shown exceptional leadership in Wales as a key economic driver, able to identify needs and build relationships with partners. What discussion has the Welsh Government had with local authorities on the spending of their allocations under the shared prosperity fund? And does he share my excitement that we're recognising the important role that local authorities play in leading economic renewal based on local needs? Thank you.

Well, Llywydd, I do definitely agree with what the Member said about the importance of local authorities. I'm glad that we were able to secure, in our discussions with the UK Government, belated as they were, a recognition that this reduced amount of money is best spent in Wales where local authorities co-operate on a regional basis and on the footprints that we have previously agreed with the UK Government. So, I think that's a step forward as well.

I'm pleased to say that, through our discussions, both with the Welsh Local Government Association and through the work that my colleague Huw Irranca-Davies does in leading committees in this area, that we are securing agreements with our local authority colleagues that the approach in Wales will not result in the elimination from the decision-making process of the voices that previously had been around the table at the programme monitoring committee. So, that is businesses, third sector organisations and universities. Previously, the funds that are said to be replaced by the shared prosperity fund would have been available to those sectors as well: the Business Wales scheme is funded in that way and is very important to businesses in Wales; £103 million secured previously for the third sector in Wales, and over £400 million used by higher education institutions in Wales from exactly those funds.

Now, the importance of local government is a point well made, but those other sectors are also very important in making sure that the funds that will come to Wales are spent to best effect, and I'm glad that, as a result of the discussions we have had with our local government colleagues, there are assurances that those voices will continue to be influential in the way bids and then funding proposals for the shared prosperity fund in Wales are developed.