Thank you, Mike. We recommend that an independent body should assess both the Welsh and UK Governments' claims around the levels of future funding and how this compares to previous EU funding. We are pleased that the Welsh Government has agreed to this recommendation, but, unfortunately, we did not receive the same commitment from the UK Government. We therefore urge the Minister to pursue the issue at the Finance: Interministerial Standing Committee when it next meets.

Let's move on to the UK Government acting in devolved areas. A major concern for us is the UK Government using these funds as vehicles to act in devolved areas, namely through the financial assistance powers in the United Kingdom Internal Market Act 2021 and the Multiply programme. We also have sympathy with the Welsh Government that it is being bypassed in the decision-making process. The Finance Committee of the fifth Senedd has previously explored issues relating to the UK Government funding devolved areas via the internal market Act, so I will not reiterate those arguments today. However, the Multiply programme is further encroachment on an area that, as the Minister for Economy said, is 'plainly devolved'. We are disappointed with the method of allocating funds through the Multiply programme, and, given that education is devolved, we recommended that the UK Government provides flexibility to spend funds from the programme in other areas. We also acknowledge the Welsh Government’s position that the programme is too narrow in focus and led to the duplication of provision. The UK Government says that

'Multiply is intended to complement existing Welsh Government provision' and that

'There remains the flexibility for places to adapt the delivery of Multiply in response to their local needs.'

However, we feel that this should have gone further, to allow the Welsh Government greater flexibility to spend this funding in other areas. Worryingly, we also believe this Senedd is in danger of being sidelined, and that further consideration is required, to ensure that effective parliamentary scrutiny of these and future replacement funds takes place in Wales.

Whilst the committee appreciates the attendance of the then Secretary of State and the then Under-Secretary of State for Wales, the UK Minister with responsibility for the funds refused to attend. As a committee, we have also faced similar issues in the past trying to engage with HM Treasury and their refusal to attend committee to discuss fiscal matters that have the potential to significantly impact Wales. If the UK Government insists on acting in devolved areas, scrutiny should not be done at Westminster only. These are new, significant funding arrangements that require resilient, transparent and accountable structures that reflect the constitutional realities of the UK, and this Senedd needs to consider its role in scrutinising these funds.

I’ll move on to the three specific funds that I mentioned at the start—the community renewal, levelling-up, and shared prosperity funds. We are very concerned with the lack of engagement on all three funds between the two Governments. These are new and crucial funding streams for Wales, and a lack of dialogue risks misaligning objectives between local government and the Welsh and UK Governments. In order to ensure value for money of project delivery, we believe we work best for the people of Wales when all tiers of government work together. In relation to the community renewal and levelling-up funds, we heard from local government that the timescales for submitting bids had been challenging, and the administrative pressures may have been a deciding factor in the types of bids that were submitted. The UK Government has acknowledged this position. Furthermore, the process was described as inherently wasteful. We are therefore pleased that the shared prosperity fund has moved away from the competitive process of those funds, and we have made a number of recommendations in this area.

The Welsh Government has spoken positively about joint work with the UK Government on the free-ports programme in Wales. Equally, the UK Government said it is eager to strengthen its working relationship with the Welsh Government by building on its effective collaboration on the programme. In addition, the UK Government says it remains open to conversations with the Welsh Government on their role in any UK-wide ministerial forum, and, more broadly, on the opportunities for them to engage with SPF and other levelling-up funding opportunities. We hope the Welsh Government takes up this offer to engage, and hope the approach taken on free ports can be replicated in the delivery of SPF and future funds, in order to maximise the investment in Wales.

Finally, I’d like to look ahead at plans for future funding. The EU funding programmes were delivered over a 10-year period, with the flexibility and longer spend profiles being described as hugely important. The shared prosperity fund only has a three-year funding cycle and has restrictions on moving funds between projects and financial years. Furthermore, returning underspends from the SPF could lead to projects being proposed in order to ensure money is spent, rather than ensuring priorities are dealt with. For these reasons, we recommend the UK Government increases flexibility to move the SPF funding between financial years and between projects, as well as increasing flexibility on how underspends will be treated. We note the UK Government’s response that, and I quote:

'The UKSPF is providing local leaders with the opportunity to spend funding as they see fit and to enable places across Wales to unleash their unique potential.'

However, this response reiterates our view that the Welsh Government is being bypassed in the decision-making process. We also sought clarity on the UK Government’s long-term plans for replacement EU funding and the status of the shared prosperity fund beyond 2025. The UK Government has said that any continuation of existing or successor funds will be informed by a combination of engagement with relevant partners and evaluation of evidence, and that it would be inappropriate to pre-empt the structure and focus of future funds at this point in time. In this current economic climate, this offers little reassurance, and the committee believes that more needs to be done until we see funding arrangements that meet Wales’s needs. Diolch yn fawr.