Post EU funding in Wales
Mike Hedges MS
On 1 January 2021, the trade and co-operation agreement took effect and established the UK’s future relationship with the EU. The UK’s access to future rounds of European Union structural funding programmes was not agreed. That meant Wales would no longer get the money that it previously received from structural funds.
The UK Government has developed their new funding schemes; the UK community renewal fund, the levelling-up fund, and the UK shared prosperity fund. The Welsh Government has said that there is a reduction in the money coming to Wales. The Westminster Government has said that there is not. Both statements were said confidently and forcefully, as if there could be no argument with them. Neither has shown their workings which is an ongoing problem.
I continually request that the Welsh Government when they make financial statements, publish their calculations. All or almost all the difference of the difference was that Westminster included continued European funding that was tailing off, and the Welsh Government did not. If the Welsh Government knew that, why did not they explain that.
The competitive processes around the UK’s community renewal fund and levelling-up fund were also criticised by local authorities. Pembrokeshire County Council, which is certainly not a Labour supporting Council and is represented by two conservative MPs and two Conservative Senedd members referred to the competitive process around the community renewal fund as ‘inherently wasteful’.
The WLGA explained that when you add competition for the funding, all local authorities put in a lot of resources and spend a lot of time, and other organisations put in a lot of resources into bidding with no guarantee of success. Then, of course, all those applications had to be assessed. You are spending a lot of time, a lot of money, and with a lot of people ending up very upset at the end of it.
The shared prosperity fund was launched on 13 April and will cover 2022–23 to 2024–25. It is valued at £2.6 billion across the UK. The Finance Committee of the fifth Senedd expressed disappointment regarding the lack of available information on the shared prosperity fund in its report on preparation for replacing EU funding in Wales in 2018. This followed the Welsh Affairs Committee concluding in 2020 that up to that point in time there had been a failure to properly engage with stakeholders or Parliament.
Local allocations of the shared prosperity fund in Wales are distributed on a basis of population 40 per cent, community renewal fund index 30 per cent, Welsh index of multiple deprivation 30 per cent. In terms of how the distribution differs to EU funding, it is not possible to compare allocations at local authority level with previous EU funding due to most EU project allocations spanning more than one council area. There is an apparent shift away from the west Wales and the Valleys region towards east Wales. I would put it much more simply: from the poorer parts of Wales to the more affluent parts of Wales. I welcome the shared prosperity fund moving away from the competitive funding process of the community renewal and levelling-up funds.
Coming on to what I think is the most critical issue for the future; I believe universities are the key to improve the gross value added of Wales and the median income of the people ofWales. If we look at successful cities, regions and nations, the role of universities is crucial to economic success. Successful areas also have highly educated and skilled people living there. Why are Palo Alto and Cambridge substantially more successful than anywhere in Wales by, why is Mannheim in Germany the same.
They have successful universities, a highly skilled workforce and attract both start-up companies and existing companies because of this. If we are going to increase the wealth in Wales we need more support for universities, more money spent on universities, and more research being carried out. The UK’s ongoing uncertain future relationship with Horizon Europe is adding to the pressure facing Welsh universities. Universities Wales have welcomed the recent confirmation from the Westminster Government that associating with Horizon Europe remains the ambition of the UK Government. I welcome that, in the interim, there was an announcement of a funding package to invest in the UK research and development sector. It will be beneficial if the UK remains closely associated with Horizon Europe in the future, if only to allow people with great skills to come into this country and also to collaborate with other Universities in Europe and recruit with those great skills in order to improve our wealth.
The announced investment from the UK Government includes an uplift of £100 million in quality-related funding for English universities, and we get a Barnett consequential for Wales. Quality-related funding is essential in enabling our Welsh universities to compete and attract additional investment to Wales, bringing benefits to communities across the country. Providing this funding to Welsh universities will help mitigate the impact of the uncertainty over the future association with Horizon Europe and a loss of European structural and investment funds, but, fundamentally, if you want to be a wealthy nation, you have a highly skilled, highly educated workforce, and outstanding universities which you support.
Mike Hedges is the Senedd member for Swansea East