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Vaughan Gething MS, Minister for Economy

First published:
20 January 2023
Last updated:

Yesterday, the UK Government announced the successful bids from the second round of its Levelling-Up Fund, which directly allocates funding in areas devolved to Wales.

In Wales, 11 of our 22 local authorities have had bids accepted. Of the 43 bids made by Welsh local authorities, 11 have been successful. Of the £790m in funding applied for, £208m has been approved.

The Levelling-Up Fund, like the Shared Prosperity Fund, has been beset by delays and it is now almost six months since applications were submitted to the UK Government for assessment.

These delays have created significant pressures on the local authorities that will now be taking projects forward, as well as increased inflationary costs. This will have consequences on delivery, value for money and economic impact.

The Fund is another area where the UK Government is using the UK Internal Market Act powers to take spending decisions directly in devolved areas while bypassing the Welsh Government and Senedd.

In November 2020, it was announced the Levelling-Up Fund would operate in England, with the Welsh Government receiving Barnett consequential funding. However, in February 2021 the UK Government then decided to deliver the Fund on a UK-wide basis with no prior consultation or communication.

This chaotic approach has been a consistent feature of the UK Government’s attempts to forcibly operate in devolved areas. Its replacement scheme for EU funds, the Shared Prosperity Fund, leaves Wales £1.1bn short and is now directly resulting in redundancies and the closure of previously EU-funded programmes in areas such as skills, R&D and support for the most vulnerable people.

A range of cross-party committees, both in the Senedd and Westminster, as well as independent think-tanks and the National Audit Office have echoed many of our criticisms of the approach the UK Government has taken to Levelling-Up and post-Brexit funding.

This includes lack of partnership with devolved government, unsatisfactory accountability for outcomes, fragmentation of the funding landscape and limited economic potential.

While yesterday’s announcement confirms a limited number of projects, levelling-up leaves Wales with less say over less money. It represents a damaging attack on democratic devolution and it is a matter of deep regret that flawed UK programmes in devolved areas are costing Wales jobs and growth.

We will continue to work with local government and partners to maximise the funds that are available and support the sectors facing significant cuts as a result of a UK Government approach that has little regard for devolution or the distinct needs of the Welsh economy.