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Shared Prosperity Fund

Volume 820: debated on Thursday 24 March 2022


Asked by

To ask Her Majesty’s Government what recent discussions they have had with the First Minister of Wales about the shared prosperity fund.

In the UK shared prosperity fund pre-launch guidance, the UK Government stated the ambition to work with the Welsh Government and we remain committed to this. The Secretary of State and First Minister have discussed the UK shared prosperity fund alongside our wider levelling-up agenda. We remain open to further engagement at ministerial and official level.

There is a broken promise to replace EU funds for Wales and it is set to cost the country £1 billion over the next three years, so I ask the UK Government to co-operate fully with the Welsh Government to redress this huge deficit and treat this matter with urgency and the respect that it deserves from one Government to another. Could the Minister bring regular updates to the House on the content and progress of such discussions of the shared prosperity fund and, indeed, any related matters of funding for Wales?

My Lords, there is a very clear commitment to match EU funds in Wales through Wales’s share of the £2.6 billion UK shared prosperity fund. We recognise the importance of very close collaboration with all our devolved Administrations, including Wales, and every aspect of my department is working closely with its Welsh counterpart. I even had a letter two days ago from the Climate Change Minister about building safety. We can learn a lot from each other and can continue, at an official and a ministerial level, to work on the guidance on the UK shared prosperity fund.

My Lords, programmes backed by the European Social Fund have supported more than 77,000 people in Northern Ireland to overcome obstacles to social inclusion and unemployment. With ESF funding due to end this month and with no funds from the Executive at Stormont, what additional support do the UK Government intend to offer through the shared prosperity fund to ensure that the wonderful work done by local specialists and voluntary organisations with those programmes can continue in Northern Ireland?

Timing is everything and of course we are just at the point of announcing how we intend to approach the disbursement of funds through the UK shared prosperity fund. At that point, we will be able to give a very full answer to the noble Lord’s question.

My Lords, on that very point, I welcome the principle of distributing funds to counties and regions rather than by some spurious competitive bids, but what will be the parameters for deciding on allocations? Will there be a strategic approach? What will be the role and responsibility of the counties and what will be the mechanism for delivering regional co-operation? What will be the function of the Welsh Government in making this happen?

My Lords, yet again, it is about looking at the detail that will be contained in the pre-launch guidance publication—which is, as I say, very imminent.

My Lords, of course the UK shared prosperity fund is very important, but can my noble friend tell the House what else Her Majesty’s Government are doing to level up Wales?

My Lords, I am always reminded that on all sides of the House we have tremendous support for Wales, including on the Front Bench. My noble friend is right to probe, and in response I can say there is more than £18 billion through the Welsh block grant, £167 million in local growth funding, a share of the £2.6 billion shared prosperity fund, £900 million for Welsh farmers and a £130 million British business bank fund to support Wales’s small businesses. That is considerable investment to ensure that Wales prospers.

My Lords, we have gone from “not a penny less” to analysis showing that, by 2024, the Welsh budget will be £1 billion worse off, as the noble Baroness has already said. With very little clarity at the moment on plans going forward, is it not now time to respect devolution, restore the missing £1 billion to the Welsh budget and put Welsh decision-making on building stronger local economies back where it belongs, in the hands of Welsh Ministers?

We are getting some mixed messages from the House. On one hand we have that desire to see that we empower regions and functional economic areas through councils, but we do recognise that it is important to have proper engagement and collaboration with the Welsh Government. Indeed, at official level and also through the Welsh Local Government Association, that continues to happen, as it does at the level of the Secretary of State, who had a meeting, in the levelling up and housing committee, with the Welsh Local Government Association and local authority leaders. I believe that Minister O’Brien also met ministerial counterparts yesterday. So, yes, we must continue to build on collaboration, and I just caution against the idea that we should model into the future and say that there is a gap. We want to make sure that we repair the public finances, post pandemic, so that every part of this great country gets the investment it needs to prosper.

My Lords, although I suppose I could thank the Minister for his warm words about Wales, the truth is, as my noble friend Lady Wilcox pointed out, that Wales is being consistently short-changed post Brexit, and we are seeing power grabs as well from Westminster, such as in the Subsidy Control Bill, which has been described as having a “pernicious effect on devolution” by the Senedd committee responsible. Surely the Government should start talking directly and understanding that devolution is going to work only if Whitehall respects it, both in funding terms and in terms of powers—and it is not doing so at the moment.

That is essentially more of a comment than a question, but there is a real respect for both the Welsh Government and local leaders in Wales. We continue to work very productively, certainly at ministerial level and also through officials. We want to see a strong Wales—I would like to see a stronger Welsh rugby team, frankly, after the result against Italy.

My Lords, bids for the shared prosperity fund were supposed to be in by July last year and the money was supposed to have been spent by the end of next week, 31 March. How is that progressing? Also, projects were being developed in the hope that funding would be at a similar level to the European fund, including the port of Holyhead. How is the European funding of projects in Holyhead progressing?

My Lords, I will write to the noble Lord on that specific point with a very fulsome answer and I will lay a copy in the Library. I think it is fair to say that this is a problem not just for Wales: we need to ensure that we do not have these cliff edges—I used to call it “March madness”—where we rush to spend money. Certainly, we should be looking at ways of accruing expenditure to spend it a sensible way to get real value for money for the taxpayer. So, it is a point well made.

My Lords, is the Minister aware that our local authorities complain not only about the current confusion but about the limited timespan of the new scheme, which makes long-term planning more difficult?

We recognise that, frankly, we have too many funds and that we have to find ways of bringing those funds together to ensure that processes are around delivery and not around grant farming. That is a direction of travel that my department recognises as something we need to improve on in the forthcoming years—but it takes time.

My Lords, I am glad to see that one of the objectives of the shared prosperity fund is to “boost pay”. The Minister will know that the workers’ share of GDP in the UK, in the form of wages and salaries, just before the pandemic was 48.7%, compared with 65.1% in 1976. Can he provide four or five examples of how the Government will increase the workers’ share of GDP in order to meet the shared fund objectives?

My Lords, I like to be tested at the Dispatch Box, but I have been given a blizzard of statistics and an impossible request to give five examples. No, I cannot do that, but I am not sure it is particularly helpful. We recognise the need to see real economic development and a strong Welsh economy because, ultimately, that is what is going to make a difference to people’s lives.

How will rural areas such as North Yorkshire, the new unitary authority, benefit from the shared prosperity fund?

My Lords, Cornwall was in receipt of considerable EU funding. Can the noble Lord confirm that Cornwall is still in the mix for shared prosperity funding?

Cornwall is incredibly important—with its own language, even—and we want to make sure that we level up within regions and all parts of the country. We recognise the need to deal with some of the real rural deprivation that exists in Cornwall.