Regional Investment in Wales Steering Group meeting, 5 June 2025: minutes

The Chair welcomed attendees to the meeting and made a short personal introduction. She noted the First Minister had appointed her to Chair the Steering Group to April 2026, by which time we plan to have developed a new regional investment programme to succeed EU Structural Funds and the Shared Prosperity Fund (SPF).

The Chair said the purpose of the meeting would be to consider the socio-economic context in Wales and reflect on lessons we can learn from previous programmes, projects with the OECD on regional development and various studies and reports. She noted more substantive policy development would follow the outcome of the UK Spending Review on 11 June.

The Chair welcomed Grahame Guilford, Kevin Morgan and Paul Byard to the Steering Group following a process to recruit independent experts in regional policy. She also welcomed new members Jonathan Tench representing the Future Generations Commissioner and Llyr ap Gareth representing the Federation of Small Businesses.

The draft minutes of the previous meeting and the Terms of Reference were cleared for publication on the Welsh Government website.

Ciaran Downey (CD), Welsh Government Economic Adviser, provided an update on the socio-economic context in Wales.

CD informed the Steering Group that the Welsh Government is updating the socio-economic analysis that accompanied the consultation on the 2020 Framework for Regional Investment which was linked to the Framework’s four funding priorities at that time. 

On the broader economic context, CD said the 2025 update to the socio-economic analysis so far includes:

• population estimates and demography
• latest regional GDP, GVA, and GDHI figures
• latest labour market indicators
• sector employment distribution figures
• education and qualification metrics of workforce and working age population
• business demography statistics

CD also outlined business productivity and competitiveness measures to be included in the updated analysis. The expected narrative was Wales continues to face a productivity gap compared to the UK average. Addressing this involves upskilling, fostering entrepreneurship, improving innovation and R&D, and improving connectivity and vital infrastructure. 

It was noted boosting business creation and strengthening links between research and industry are key to building a more competitive economy.

CD outlined the following economic inequality measures currently captured by the updated analysis: 

• UK income inequality
• housing costs
• health outcomes
• pay distribution linked to skills
• role of tax and benefits

CD said the expected narrative was Wales experiences higher levels of low pay and lower levels of high pay than the UK and addressing these would require raising skills and qualifications, particularly amongst lower income groups, and tackling cost of living pressure such as fuel poverty and transport costs.

On Net Zero, CD said the updated analysis could include the following:

• Welsh Government carbon budgets and legislated climate targets
• emissions data
• analysis of green jobs
• renewable energy capacity and generation
• analysis of energy prices and international comparisons
• indicators of underlying progress across sectors e.g. uptake of electric vehicles

CD said the expected findings were Wales has reduced emissions in industry and power but must accelerate progress in transport, agriculture and buildings to meet climate targets.

Achieving Net Zero by 2050 is likely to involve investment in renewables, energy efficiency and low carbon transport alongside regulatory and behavioural change.

On health and communities, CD said an updated analysis would include:

• mental health indicators
• active travel statistics
• adult social care usage and projections
• analysis of unpaid care
• Welsh language statistics and projections
• access to services

CD said the expected outcomes are Wales faces rising health and social care needs due to an ageing population and high disability rates which are linked to poverty and lower well-being. Addressing falling self-reported mental health and well-being, especially amongst young people, is an increasing policy concern with social and economic consequences.

CD asked members for their views on the updated analysis and any further suggestions on what could be included.

In response to CD’s presentation, members made the following comments:

• To close the productivity gap, Wales needs to adopt Artificial Intelligence at a quicker rate than other parts of the UK.
• Focus on real living wage levels and expand indicators around Net Zero to include the circular economy.
• Businesses need certainty and clarity about who does what in relation to policy development and delivery.
• Consider assessing trends around the foundational economy and any sectoral trends on the distribution of UK Research and Innovation (UKRI) funding.
• Prioritise foundational issues. Focus investment to tackle structural causes rather than treat symptoms.
• Young people not in employment, education or training are a growing part of the economic inactivity picture and investment needs to focus there. Educational outcomes and inequality of skills outcomes should be considered as part of the analysis.
• Need to be selective about the role of grants. Invest rather than spend. There is still repayable finance from EU programmes being recycled and reinvested many years on, leaving a lasting legacy.
• The approach to updating the analysis should consider the scope and parameters of this funding, which have not been set yet.

CD noted the comments and suggestions made. He asked for any information that could support the analysis to be emailed via the Secretariat’s mailbox.

The lessons learned session comprised three parts. 

Part 1

Tom Smithson (TS), Welsh Government Deputy Director for Economic Strategy and Regulation introduced the first part of the session which involved key messages from a draft evidence paper on the characteristics of effective regional policy that had been circulated to members prior to the meeting. TS emphasised the focus of his session was on strategic policy rather than specific fund evidence.

From the evidence review, TS outlined a range of conclusions. On subsidiarity he noted the need to align spending priorities and strategies at each level of governance to avoid duplication and maximise impact.

There was a balance to be found between the need for decisions being made at the lowest level possible and the need for strategic coherence and maximising cumulative impact.

On regional policy priorities, TS said the evidence suggested focussing on root causes and distributing funding based on relative need. Key areas suggested included productivity growth, improving skills, raising wages, and tackling regional inequalities. 

Clarity around the theory of change is important to define collectively agreed outcomes and clearly make the links between inputs, outputs and those outcomes.

On funding distribution, TS noted evidence to support a long-term multi-annual financial framework which would improve value for money and enable more strategic investment approaches. In contrast, short-term approaches typically resulted in sub-optimal investments and higher risks of funding being used to replace core funding or lack additionality. 

Match-funding and additionality would help maximise investments and increase productive capacity.

On responsibilities at national level, TS noted evidence to support a role involving setting objectives and coordinating policy and less on implementation and direct delivery. Different levels of responsibilities could be devolved to regions based on capacity and capability levels.

National responsibilities could also include setting conditions and incentives, measuring overall performance, sharing best practice, and providing guidance and support for delivery. National-scale investments should complement regional and local funding.

At regional level, TS said the evidence supports a distinct strategy for investment in regions based on needs and aligned with a national strategy. This should include an assessment of regional strengths and assets, specific gaps or weaknesses to address and opportunities for experimentation.

The evidence suggested regional roles should also include collaboration with the national level and other regions to avoid risks of fragmentation, increasing complexity or duplication. Collaboration with the local level was also needed to engage partners, support delivery approaches, and ensure regional plans have local support.

On opportunities for simplification, TS said streamlining to avoid duplication, simple national rules and avoidance of too much focus on compliance over policy expertise featured strongly, as well as consideration of opportunities for standardisation in some areas to avoid complexity.

On monitoring and evaluation, setting out the approach and intent early in the policy process by defining clear goals and outcomes is important. Tailored guidance, clear accountability based on outcomes, and robust performance measurement supports better decision-making. 

TS noted the importance of collaboration between different tiers of government, between policy areas and between regions and other places. This is needed to avoid complexity, fragmentation, duplication and competition, and help support common goals, multi-area approaches and learning from good practice.

In conclusion, TS summarised the main principles of the 2020 Framework for Regional Investment which reflects much of the evidence in the paper and can be built upon to inform the post-2026 approach.

Part 2

Rebecca Askew (RA), Welsh Government Senior Research Officer, presented some early findings from the Welsh Government’s lessons learned survey on the SPF launched in April via the Steering Group.

In total, 175 survey responses were submitted, including from local authorities, SPF beneficiaries and groups that had applied for funding but had been unsuccessful.

RA’s presentation covered emerging findings which are subject to change following further analysis. A final report will be published on the Welsh Government’s research and statistics webpages.

Part 3

Paul Relf (PR), Economic Development and External Funding Manager at Swansea Council, shared some reflections on the local government experience of the SPF.

PR said the SPF allocation of £585 million has now been fully committed by Welsh local authorities apart from a small amount of the ring-fenced funding for the adult numeracy programme, Multiply. Additionally, the SPF transition year has allowed the Fund to continue seamlessly beyond its original closure date of March 2025.

PR noted the outcomes achieved during the three years of the SPF in Wales. He said the experience had strengthened the ability of regional and local partners to deliver around UK and Welsh Government policy priorities, tailored to regional/local strengths and opportunities.

PR said all four regions have worked with a wide range of national, regional and local stakeholders in creating a programme of place-based economic regeneration measures. This has involved cross-sector partnership working.

PR said visible and sustainable improvements resulting from combined investment in places are now being seen – for example, where SPF revenue has supported capital investment via the Welsh Government’s Transforming Towns programme.

Data was provided on SPF outputs to date which included, for example, jobs created and safeguarded, enterprises receiving grants and support, employment and skills outcomes and public realm improvements.

PR added significant expertise and capacity have been created in regional/local networks across both local government and regional/local stakeholders.

PR noted all four regions have worked within evolving regional structures and followed a strategic approach led by members and partnership structures including Regional Learning and Skills Partnerships and City and Growth Deal programmes. 

PR concluded by saying that local authorities welcome the opportunity to co-design the post-2026 investment landscape across UK, Welsh and Local Government, and to continuing to build confidence and economic regeneration in businesses and communities.

Following the three presentations, members made the following comments:

• Need to accommodate role of CJCs in economic development and move away from simplistic target setting. A better relationship between CJCs and Welsh Government is needed.
• Supporting digitalisation is vital. Many manufacturers won’t survive unless they adopt it more quickly. The HE sector had issues engaging with the SPF.
• The third sector did not have a generally positive experience of the SPF and queried the socio-economic impact of the fund. Important to move quickly as the financial transition between the European programmes and the SPF cost jobs and expertise within their sector.
• Reports in the evidence review lack recency and do not adequately reflect issues related to rurality.
• ‘Spending’ will always result in positive outcomes but will only be transformational if it addresses root problems. We have nationally strategic priorities in renewable energy and digital connectivity.
• Local, regional and national don’t have to be mutually exclusive if efforts are aligned to achieve overall missions.
• Important to create a credible investable proposition for Wales. Funding needs to be seen as a lever, a catalyst and a recyclable source not as a specific pot to be spent within a specific timescale.

The Chair thanked members for their attendance and participation. She noted the next meeting will take place following the Spending Review outcome and a diary marker would be sent out in due course.

No further business was raised.

Chair 

Carolyn Thomas MS

Members

North Wales CJC; Alwen Williams, Chief Executive

South-West Wales CJC: Ainsley Williams, Director of Place, Infrastructure &

Economic Development; Helen Morgan, Economic Development Manager

South-East Wales CJC; Kellie Beirne, Chief Executive

Welsh Local Government Association: Tim Peppin, Corporate Director

Third Sector Partnership Council: Matthew Brown, Deputy Chief Executive, Wales Council for Voluntary Action

Third Sector (Social Enterprise): Glenn Bowen, Director of Enterprise, Cwmpas

Medr, the Commission for Tertiary Education and Research: Angela West, Senior Skills and Employability Manager

Universities Wales (Higher Education): Amanda Wilkinson, Director

Colleges Wales (Further Education): Catherine Jenkins, Director of Employability, Gower College Swansea

Natural Resources Wales (Environmental); Mary Lewis, Head of Natural Resource Management and Policy

Chambers of Commerce: Gus Williams, Chief Executive, South and Mid Wales 

CBI (Business): Leighton Jenkins, Assistant Director, Policy

Wales Rural Network (Community-led local development): Eirlys Lloyd, Chair, Wales Rural Network

Development Bank of Wales: Rob Hunter, Director of Strategy

Future Generations Commissioner: Jonathan Tench, Director of Wellbeing Economy

Local Government (Shared Prosperity Fund regional leads): Dylan Rhys Griffiths, Gwynedd Council; Natalie Chambers, Ceredigion Council; Simon Gale, RCT Council; Paul Relf, Swansea Council

Grahame Guilford and Company: Grahame Guilford

Cardiff University: Kevin Morgan

Welsh Government attendees

Tom Smithson, Deputy Director, Economic Strategy and Regulation

Alison Sandford, Regional Investment, Head of Policy and Partnership Working 

Mike Richards, Regional Investment, Communications Manager

Claire McDonald, Deputy Director, Economic Policy

Jonathan Bonville-Ginn, Senior Economic Adviser, Economic Policy

Ciaran Downey, Economic Adviser, Economic Policy

Llyr Griffiths, Assistant Economist, Welsh Treasury

Liz Lalley, Director, Economic Policy and Strategy 

Lee Antrobus, Policy Manager, Local Government and Planning