3. Will the Minister outline how the Welsh Government and the UK Government are working in tandem on delivering levelling-up funding? OQ58098

Yes. The UK Government has deliberately bypassed our devolution settlement and is running both the levelling-up and shared prosperity funds from London. The last-minute offer of an advisory role in the shared prosperity fund was wholly inadequate and symptomatic of the UK Government's botched approach to post-Brexit funding.

Well, thank you very much for your response. It's a reflection of the situation. But, of course, the situation is disappointing, isn't it? Because, back in 2019, Wales was a net beneficiary of funding from the European Union, receiving hundreds of millions of pounds every year, and that drove economic programmes and also attracted match funding from private and public sources. But, as you've said in your response, the Welsh Government is now being shut out of this process. We're moving from a holistic, strategic approach to a competitive model that sets local authorities against each other instead of bringing them together, and which elevates the role of Members of Parliament to some kind of adjudicators who almost have some kind of veto on these schemes. It takes us in the wrong direction. Instead of Wales coming together to pull in the same direction with complementary investments, now we see everyone being encouraged to go their own way, often at the expense of others. It's also an intentional step to cut out the Senedd from this process and to undermine the mandate and the democratic oversight that we have here. So, in light of all that, do you agree with the calls of Plaid Cymru that all responsibility over post-Brexit funding sources should be devolved to Wales?

Thank you very much for raising that, and also for the motion that Plaid Cymru have tabled for later on this afternoon, when we can explore this together in further detail. But I share that concern that it does potentially pit local authorities against each other at precisely the time when we're trying to encourage collaboration and working together. But it's not even just local authorities, of course; previously, you would have had higher education, further education, the private sector, the third sector, all benefiting significantly from EU funding. But now, in terms of making local authorities administrators in the SPF, that's causing, I think, potential challenges with that relationship as well. So, you know, I think that—. I referred to it as 'botched' in my original answer; I think that that's being polite.

I think that the point about bypassing the Senedd is also really important as well, because the UK Government has said that they'll be devolving more locally, but that's absolute rubbish, because no funding or decision-making power at all is being devolved. Because Welsh local authorizes have to prepare plans but then they're assessed by Whitehall officials and decisions are made by UK Government Ministers in London, so there's no devolution of these things to that kind of more local level that the UK Government refers to.

And then of course there's the important point about the loss of funding. We will be facing a loss of £1.1 billion in unreplaced structural and rural funding between 2021 and 2025, and that of course includes a £243 million loss in rural funding. I can hear the Member who is a farmer himself talking about this as we discuss this question. So, clearly, Wales is absolutely worse off and the promises made to us have been broken.

Of course, levelling-up funding is crucial to how we will work in the future here in Wales, because there's so much that can be done to help regenerate our high streets, our town centres, tackling crime, antisocial behaviour, and this money can make a real difference in those communities. And of course, one of the aspects, actually, we on these benches do support, and actually local government does support, is that funding being in the hands of those local authorities, because this is devolution, and this is where it doesn't stop here at Cardiff Bay, and despite your concerns, Minister, local authorities that I know and work with are excited about the opportunity to feed into this process directly, rather than being dictated to from Cardiff Bay. So, in light of this, Minister, what discussions are you having, and what ongoing discussions are you having, with local authorities to ensure that levelling up is made a success?

I would be very surprised indeed if local authorities are referring to our regional funding approach previously as 'being dictated' from Cardiff. I would be very surprised indeed, because our approach has always been incredibly collaborative. It's about trying to ensure that decisions are taken in partnership. And let's remember that the levelling-up fund has been—. It's just sprinkling tiny, tiny bits of money across Wales. Let's remember the first funding round was launched in March 2021, and successful applicants weren't notified until October of that year, and, in the first round, only six local authorities in Wales received funding. That was for 10 bids, worth £121 million. Unsuccessful bids across Wales were worth well over that—£172 million—so, I think that there would be more disappointed local authorities than pleased by this particular scheme, and I see absolutely no prospect of this tiny amount of money the UK Government is providing contributing to any kind of levelling up in Wales or elsewhere.

It was fascinating at the weekend to see a little evidence of blue water appearing in the leader of the Conservatives' speech—it wasn't so much an ocean or even a river, nor a stream; it was more a rivulet, or perhaps a rill, a tiny little trickle—in terms of HS2 funding. But, of course, we've also seen the announcements on Crossrail in recent years, and the Victoria line this weekend, and, you know, it's fantastic to see all that investment going into the south-east, but this has an effect in Wales; we've been starved of funding for levelling up in our railways over decades. I can actually say that we're finally getting the Tondu signalling getting done—15 to 20 years after it should have been, because it was taken away to the south-east of England to do investment there, but we're finally getting it done.

So, Minister, do you have any idea what sort of figure you could hand to the Conservative leader to say, 'In addition to HS2, here's the sum of money we need to level up investment in the railways in Wales'?

It's really pleasing to see that scales have fallen from the eyes of the leader of the Conservatives in respect of HS2 funding, and I hope that he has similar revelations in respect of the £1.1 billion that has been lost to Wales—and this is a fact—as a result of the UK Government's approach to Brexit. So, our approach to rail infrastructure funding has been a result of consistently being shortchanged by the UK Government. Over the past 20 years, we've received less than 2 per cent of the £102 billion the UK Government has spent on rail enhancements, despite us having 5 per cent of the population, but, worse than that, 10 per cent of the tracks. And we don't have fair funding in respect of rail infrastructure at all. Despite Network Rail's Wales route having 11 per cent of the route length, 11 per cent of the stations and 20 per cent of the level crossings across in England and Wales, only an average of around 2 per cent of that money has been spent on network enhancements since 2011. So, that's clearly extremely disappointing.

What could we have instead? We could be decarbonising our rail network in Wales; we could be addressing the disparities created by the cancellation of electrification to Swansea; we could be implementing the recommendations of the Burns commission more quickly in south-east Wales; we could be delivering that north Wales metro more quickly, including improved links, I have to say, to HS2; and we could be investing in important local schemes such as increased frequency on the Maesteg line and reopening of the Abertillery spur. These are things that we could have had had we had fairness from the UK Government.