Part of the debate – in the Senedd at 3:24 pm on 30 November 2022.
The new funding arrangements established since the UK left the EU represent a seismic shift in the way that money is allocated to Wales and the role of the Welsh and UK Governments in that process. Our overriding finding was that the successful implementation of these new funds in Wales is endangered by the lack of engagement between the Welsh and UK Governments. The delivery of funding under these arrangements should not just be about sharing money across the UK; it also needs to be about the sharing of ideas and responsibilities if it is to be a truly partnership approach.
We made 20 recommendations in our report, which includes recommendations aimed at the Welsh Government and the UK Government. I am thankful to the Secretary of State for Wales and the Secretary of State for Levelling Up, Housing and Communities for providing a written response to our recommendations. We appreciate the UK Government is not accountable to the Senedd. However, the successful delivery of EU replacement funding will require co-operation from both Governments, and therefore we are grateful the UK Government has been part of the scrutiny process. I would also like to thank the Minister for Finance and Local Government and the Minister for Economy for their joint response to our report and for accepting all the recommendations that apply to the Welsh Government.
Given the time today, I will cover our main concerns and findings. I'll start with the level of funding for Wales. When we embarked on this inquiry, a key consideration for us was how the new funding proposed for Wales compared to the funding received while the UK was a member of the EU. The Welsh Government states there is a £1.1 billion loss of replacement EU funding in Wales. The UK Government told us the shared prosperity fund will ramp up as remaining EU funds tail off. It says providing both wasn’t something that was ever promised. Substantiating these competing claims has not been possible, because it was clear the Welsh and UK Governments were not considering how the new funding proposed for Wales compares to the funding received while in the EU in the same way. Therefore, we were unable to take a view on whether Wales is due to receive more, less or the same level.
The UK Government's autumn statement adds to uncertainties regarding the future of these funds and their value. Whilst we understand it is necessary to explore the different perspectives around replacement funding during our inquiry, we spent so much time unpicking the basic principles of each Government’s argument in relation to the level of EU funding. We received evidence suggesting that funding announced to date by the UK Government is short of what Wales would have received if we had remained in the EU, albeit any future EU funding is an estimate, and therefore there is a level of uncertainty about that value.
Over the course of the inquiry, we have seen more detailed information published by both Governments, but it is unhelpful for Governments to disagree as they have, and to not promptly and fully publish the detail of their perspective. It is disappointing that the level of disagreement between the two Governments continues. The Welsh Government claims the UK autumn statement means the overall value of the SPF for the UK has been reduced by £400 million to £2.2 billion by the end of 2024-25. However, only yesterday, we received correspondence from the UK Minister for levelling up stating that this is incorrect. This is exactly the type of dispute that we believe needs to be avoided if these funds are to succeed. My predecessor has previously written to the two Governments, highlighting the importance of transparency in funding calculations. It makes our job of effective scrutiny even harder when there are disagreements like this over levels of funding.