5. Will the First Minister provide an update on discussions with the UK Government regarding the future of levelling-up funding? OQ59122

Despite the fund operating in a plainly devolved area, the Welsh Government has been denied any role in its development or implementation in Wales. The levelling-up fund, like the shared prosperity fund, has been beset by delays, underfunding and chaotic arrangements that are costing Wales jobs and growth.

Thank you for that answer, Minister. The last meeting of the cross-party group on industrial communities heard from Professor Steve Fothergill on the Industrial Communities Alliance's six principles to streamline levelling-up funding. One principle is that funding should be strongly targeted to focus on the most disadvantaged places. This approach is critical for communities like the ones that I represent in Cynon Valley. Kevin Morgan and Richard Wyn Jones have also described how UK Government policies fail to deliver that concentration of resources to the poorest regions that marked European funding. With that being the case, what discussions have the Welsh Government had with UK Ministers to ensure the needs of our most disadvantaged communities are met?

Thank you. Ministers have had ongoing discussions around the levelling-up fund, but I'm afraid it's fallen on deaf ears. We've absolutely, consistently argued for funding to be needs based rather then allocated on a competitive basis. As you know, local authorities have had to bid. Unfortunately, the UK Government has taken an approach that saw just 11 out of 43 Welsh bids approved in the recent round 2, and areas including Merthyr, Newport and Flintshire not having received a penny in either of the first two rounds. Those three local authorities have had absolutely no funding from the fund at all.

With the shared prosperity fund, we recommended a funding formula that weighted 70 per cent for the Welsh index of multiple deprivation, but again, the UK Government just pressed on with the formula that weighted just 30 per cent for the WIMD. As a result of that, economic development funds are being redirected away from the areas that you refer to that really need them the most. We've now only got one round of the levelling-up fund left, and there's just 20 per cent of the funding, which is about £1 billion, left for next year's final round. There's very little remaining potential, really, and what we must remember is that levelling-up in Wales means a £1.1 billion loss in unreplaced EU funds—a Welsh budget cut in real terms.

As you've pointed out, Minister, those councils in Wales successfully applying for those 11 projects with £200 million worth of funding, I'm sure, is welcome for many communities and is going to be transformative for people up and down Wales. More broadly, of course, Wales received three times the amount of funding per head than the south-east of England—the highest area per head of funding across Great Britain. And of course, our local councils being empowered to deliver on these projects and apply for these projects is another example of devolution taking place at a more community-based level. I wonder, Minister, whether you'll be joining me in welcoming that empowerment of our local authorities. Also, would you share what plans you have to see further funding responsibilities being devolved down to our local authorities here in Wales? Diolch yn fawr iawn.

The Member clearly didn't hear what I said. Levelling-up in Wales means a £1.1 billion loss in unreplaced EU funds—a Welsh budget cut in real terms. It's also an assault on the devolution settlement, which might have passed him by. I think having deeply flawed UK Government programmes foisted on us is not something to celebrate at all. They'll have a very limited impact. They'll probably be poor value for money as well. I think many excellent bids were put forward, but unfortunately missed out because UK Ministers in London just picked winners and losers and made decisions on local projects here in Wales.