Strategic Forum for Regional Investment in Wales meeting, 9 November 2021: minutes

The Chair opened the meeting and thanked members for attending. He noted that significant developments had taken place since the previous meeting with successful bids to the Community Renewal and Levelling-Up Funds having been announced, as well as the long-term spending profiles for the Shared Prosperity Fund.

The Chair added that a Ministerial Working Group on Regional Investment had taken place on 4 November, which he and Peter Ryland (PR) would provide an update on during the meeting.

The meeting protocols were covered and the 7 October meeting minutes were cleared for publication on the Welsh Government website.

The Chair invited PR to provide an update on behalf of the Welsh Government.

PR said that following last week’s Ministerial Working Group (MWG), it’s clear that Ministers believe there is still a lot to fight for regarding future regional investment arrangements, and are keen to maintain pressure on UK Government to meet Referendum promises.

PR outlined the UK-wide financial profiles for the Shared Prosperity Fund (SPF) which were announced at the 27 October UK Spending Review. They are:

• 2022-23 – £400m
• 2023-24 – £700m
• 2024-25 – £1.5bn

While the long-term SPF funding has been clarified, the UK Government is still working out the priorities for this funding.

PR noted that the Multiply programme, announced as a UK-wide SPF-funded numeracy programme during the Spending Review, was still in the early stages of development. PR added that while the Welsh Government has had no input into the programme, the SPF supporting strategic projects is potentially a welcome development and illustrates that further dialogue between governments is necessary.

PR said that the UK Government is increasing its use of the financial assistance powers in the UK Internal Market Act to operate in devolved areas without the consent of the Welsh Government, with Multiply being a further example amongst several others funding investments announced at the Spending Review. This is unacceptable to Welsh Ministers and the First Minister is raising it with the Secretary of State Michael Gove at intergovernmental meetings.

Six local authorities were successful with bids to the Levelling-Up Fund, securing £121m in total for 10 projects. The successful bids came from Carmarthenshire, Ceredigion, Pembrokeshire, Powys, RCT and Wrexham.

21 Welsh local authorities have secured £46.8m for 165 Community Renewal Fund (CRF) projects. Most local authorities will receive between £2m – £3m for a broad variety of small, localised schemes.

PR said that the CRF has been run in a similar way to the 2000-2006 Objective 1 programme. He added that the learning from that period was that better value for money was achieved when investment was aligned to existing economic strategies.

He said that the Welsh Government is hopeful of better engagement from Michael Gove’s department and more routine intergovernmental meetings offered another platform for better dialogue. He also noted that the Welsh Minister for Economy was going to be discussing this topic at the forthcoming Senedd Economy, Trade and Rural Affairs Committee.

PR clarified that the fortnightly intergovernmental relations meeting is currently the only routine platform for Ministerial engagement on this issue, although the Economy Minister has written to Michael Gove and the Finance Minister is also engaged in this matter.

The Chair said that Welsh Ministers are attempting to engage constructively but it is important that UK Government not only engages with Welsh Government, but also the Welsh policy framework, regional priorities and the approaches recommended by the OECD.

The Chair thanked PR and invited Tim Peppin (TP) to provide an update on behalf of the WLGA.

TP stated that Welsh local authorities had secured a good share from the Community Renewal Fund with 23% of the total UK-wide funding.

The projects funded are in a range of areas including employability, enterprise, skills, nature, digital, energy, town centre regeneration and tourism. The UK Government is meeting stakeholders to discuss successful bids, but no feedback has been provided on unsuccessful bids.

TP stated that his understanding was that the CRF would not be repeated next year and that the full SPF would commence.

TP outlined the funding that would come to Wales in future SPF years should the same success rate (i.e. 23%) as this year’s CRF be achieved.

• 2022-23 – £92m
• 2023-24 – £161m
• 2024-25 – £345m

Welsh local authorities secured £121m of the £293m applied for through the Levelling-Up Fund. TP said many local authorities didn’t apply due to capacity issues but would likely bid in future rounds, the next opening in Spring 2022.

The Chair thanked TP and introduced Geraint Green (GG), Head of Programme Management for the European Social Fund and European Territorial Co-operation in WEFO.

GG outlined the key objective of projecting Welsh local, regional and national strengths to create greater international collaboration opportunities and more sustainable outcomes.

GG said that the funding environment was competitive with new approaches being taken by UK Government, lack of clarity over Horizon Europe participation and the loss of Structural Funds, as well as the ongoing uncertainty over the future UK/EU relationship.

He outlined the importance of Horizon 2020, the predecessor to Horizon Europe, where Welsh partners had been engaged in projects worth EUR 2.5bn. Welsh businesses had been particularly successful in the programme, securing EUR 37m – a greater private sector share than the UK equivalent.

GG showed a graph representing the scale of collaboration between Wales and Ireland generated by the EU’s Ireland-Wales Co-operation programme, and said that it was important these links aren’t lost following the end of participation in EU Territorial Co-operation programmes.

GG stated the Welsh Government’s Framework for Regional Investment included resources and opportunities for cross-border collaboration. If the UK Government doesn’t provide the Welsh Government with replacement EU funding, there will be budgetary challenges to these ambitions. In this event, GG felt that a Welsh Government coordinating function and positive collaboration with UK Government was vital.

On Irish collaboration, GG said that a University of Strathclyde study had identified a number of economic benefits to continued co-operation within the Irish Sea space. Welsh Ministers have instructed officials to escalate this work with other devolved governments.

GG outlined the funding and support available via the Welsh Government’s SCoRE Cymru scheme, and set out the next steps which include:

• 2022 Irish Sea stakeholder workshop
• Further SCoRE Cymru funding calls
• Exploring the potential for bilateral/multilateral calls with important regions and nations

In response to GG’s presentation, members raised the following points:

• the importance to Higher Education of a positive resolution with Horizon Europe and increasing pessimism within the Further Education sector more broadly.
• the potential to engage with other countries beyond Ireland and those with a similar profile to Wales.

GG noted the concerns within HE and FE and said that the Welsh Government’s international strategy would guide cross-border collaboration citing the progress with Ireland, engagement with the Basque region, and the Wales in Germany campaign.

The Chair asked members to consider the ongoing role of the Forum and noted its value in providing a platform for dialogue and feedback between stakeholders and Welsh Government.

The Chair said that the next meeting would include an item on Research and Innovation, as well as an opportunity to discuss any developments with the Shared Prosperity Fund.

A member noted that the British Business Bank is due to make £130m available in Wales. Officials from the Development Bank of Wales are working to ensure the funding does not duplicate existing provision and works alongside Welsh Government initiatives.

The Chair thanked members for their attendance. The next meeting will take place in January with a diary marker to be issued when the date is confirmed.

Chair

Huw Irranca-Davies MS

Members

Welsh Government Attendees