November date for EU funding replacement for Wales

European funding has gone towards projects ranging from small scale to large, such as improving the Heads of the Valleys Road.

The UK Government says it’ll give details of its proposed replacement for European Union funding after November 25th, more than three years after it was first announced and with little or no time for the consultation which was promised.

The news has immediately drawn criticism from opponents and supporters of the UK Government alike. 

The Welsh Government says “the lack of communication on this vital issue has been truly appalling.”

A former Welsh Secretary has welcomed ‘movement at last’ but said “it leaves little time for scrutiny and consultation” while Plaid Cymru said “the lack of urgency … is scandalous.”

The chair of the Senedd’s committee on European issues said that, with the new fund due to be operating by next April, any consultation now wouldn’t be “meaningful.”

Wales has received nearly £2bn since 2014 from European Union structural funds - a series of funding streams aimed at reducing inequality which are combined with money directly from Westminster. They’re administered in Wales but have to meet rules and priorities set by the EU.

The money has gone into schemes ranging from large road projects, like the Heads of the Valleys road, to grassroots community groups.

The UK Government first announced in 2017 that it would replace EU funding schemes with something to be called the Shared Prosperity Fund (SPF).

It was a commitment again in the Conservative manifesto for last December’s General Election which promised to “at a minimum match” the funding totals. 

Amanda Milling announced that details of the new fund would come after November 25th Credit: PA, Victoria Jones

In response to a question in the Commons today (Thursday) the UK Government minister Amanda Milling told MPs that “as we said in our manifesto we will introduce a UK shared prosperity fund that will match, at a minimum, the current levels of funding to each nation from EU structural funds, the arrangements, this will be confirmed following the upcoming spending review.”

The Chancellor is expected to announce the results of his spending review on November 25th.

I understand that the amount of the new Shared Prosperity Fund will form part of that announcement and is expected to match the amount spent under EU structural funding programmes but details of the way the new scheme will operate may not come till later.

Whenever it's announced it's clear that the details are now being finalised as a series of meetings linked to the spending review are now taking place.

It's also become clear that, within the timetable set out by Amanda Milling, a consultation exercise would be difficult if not impossible.

There has been a promise of consultation from soon after the SPF was first announced.

Throughout 2018 UK Government ministers repeatedly said a consultation exercise would begin that year with statements in 2019 suggesting only that it had been delayed because of parliament's Brexit crisis.

Now it seems the notion of a formal consultation exercise has disappeared completely with UK Government ministers looking at a series of "engagements" instead.

For instance I understand that the Secretary of State for Wales, Simon Hart, has a series of meetings with local government leaders, the Welsh Government's Counsel General and other stakeholders in the coming days.

Officials say too that there have already been 16 "engagement events in Wales, Scotland and Northern Ireland" which they say were "attended by representatives from a breadth of sectors and designed to aid the development of the fund."

And the UK Government is bullish about its plans for the SPF, even in the face of criticism that it intends to use it to expand the control Whitehall has over spending in previously devolved areas.

A UK Government source told me, "This is a chance to do something new. The people of Wales voted to leave the EU and they weren't happy with the way [EU] structural funds were working. The UK Government is taking the place of the EU."

The difference is, as Welsh Government sources point out, that once it awarded the money and set some parameters, the EU left administering the funds to the Welsh Government.

Everything the UK Government has said so far suggests that ministers in London will decide how, when and where the SPF money is spent.

A Welsh Government spokesperson said:

“The lack of communication from the UK Government on this vital issue has been truly appalling.

“Despite repeated requests there have been no meetings with the MHCLG – who are leading on this - at ministerial level, since the Shared Prosperity Fund was first proposed more than three years ago.

“We have worked constructively and intensively over those three years with local government, the private sector and trade unions, the third and further and higher education sectors, to develop a detailed framework for future regional development, which we will be publishing very soon. Any attempt by the UK Government to simply bypass this work and randomly choose pet projects to fund would be another scandalous affront to devolution.”

A UK Government spokesperson said:

“The UK Shared Prosperity Fund will bind together the whole of the UK while tackling inequality and deprivation across all four nations.

“We will continue to work closely with the devolved administration in Wales and other interested parties across the UK as we develop the fund. We will set out further details on the UK Shared Prosperity Fund following the Spending Review.”

MP Stephen Crabb chairs the Welsh Affairs Select committee Credit: PA Images

In October, the cross-party Welsh Affairs committee described the three year delay in providing detail as “simply unacceptable” and criticised “negligible progress”  in developing the Shared Prosperity Fund which they said was causing uncertainty and worry for charities, businesses and organisations. 

In response the UK Government said that it would confirm details “well ahead” of April 2021 which is when the period ends which the current EU funding covers. 

Today the former Welsh Secretary Stephen Crabb, who chairs the committee, tweeted his response:

Ben Lake MP Credit: House of Commons

Plaid Cymru's Treasury spokesperson, Ben Lake MP said:

“It is disappointing that the UK Government is still to detail its plans for the Shared Prosperity more than three years after announcing it, and four years after promising that Wales would receive not a penny less in structural funding.

“The lack of urgency in this regard is scandalous: the UK Government has made bold promises of replacing the approximately £2bn in funding that Wales received under European structural funds, and it is high time it explains how it will honour them.”

David Rees MS, Chair of the Senedd's European and External Affairs Committee. Credit: Senedd Cymru

The Labour MS David Rees who chairs the Senedd’s European and External Affairs Committee noted that Amanda Milling referred to that pledge to match the funding.

He said: “She did mention the same level of funding but not the same purposes nor the same ability of devolved governments to decide on programmes. It sounds as if they have other plans for the SPF.

"They haven’t consulted yet so I’m not surprised that they won’t do so before the spending review. Or at least it won’t be a meaningful consultation. I have a deep concern that it will be a pot for the UK government to allocate on projects they want done and not necessarily meeting the needs of local communities.”

Nia Griffith MP, Labour’s Shadow Wales Secretary, said: “Four years on from the referendum, we still have no detail on this vital funding. Now we learn that the UK Government is publishing its plans barely a month before we are due to leave the transition period, with little time for Welsh businesses to plan for the year ahead.

“The Conservatives have repeatedly promised that Wales will not lose out from the withdrawal of EU funds. It is essential that the Shared Prosperity Fund honours these commitments and respects the devolved powers of the Welsh Government to spend money in a way that benefits the people of Wales.”