Strategic Forum for Regional Investment in Wales meeting, 18 July 2023: minutes

The Chair opened the meeting by thanking members for their attendance and welcoming representatives from local government – Dylan Griffiths (North Wales), Carwyn Jones-Evans (Mid Wales), Paul Relf (South West Wales) and Simon Gale (South East Wales) – to provide an update on progress with the Shared Prosperity Fund (SPF).

The Chair ran through the agenda noting that the meeting would also include an opportunity to hear about the progress of the OECD project on regional governance, the latest on the Welsh Government’s Agile Cymru programme and Horizon Europe as well as plans to refresh the Framework for Regional Investment which many members helped co-produce.

At the invitation of the Chair, the draft minutes of the previous meeting of 27 February were passed without further comment.

The Chair invited Dylan Griffiths (DG), Carwyn Jones-Evans (CJE), Simon Gale (SG) and Paul Relf (PR) to provide an update on the progress of the SPF in each of the regions of Wales.

North Wales

• DG stated that the North Wales SPF allocation is £126m of which £15m is allocated to the adult numeracy programme, Multiply, although some of that is being moved to other investment priorities due to forecasted underspends. The primary route for project delivery will be competitive grants via a two-stage process.
• DG added that there had been 307 applications to Stage 1 of the process worth £263m of SPF funding, of which 29% were multi local authority applications. At Stage 2 of the process, there were 151 applications worth £150m of which 15% were multi local authority applications. At this stage there are also three Multiply applications worth 41% of the Multiply allocation.
• DG said that decisions on applications were expected by the end of July. He added that the localised ownership and decision-making of the SPF was welcome, but there were practical difficulties with the timeframe for delivery. Multiply is likely to be a significant challenge even with flexibility.

Mid Wales

• CJE noted their allocation was £42m with a good level of commitments being made. Grant letters are expected to be issued to successful external applicants at the end of July.
• CJE said there will be winners and losers as more funding had been applied for than is available, while delivering Multiply is likely to be a struggle, both in terms of spend and in avoiding duplication with existing provision.
• He echoed DG’s point about the localisation being positive but noted the restrictions of the SPF in terms of strategic and regional projects and the Fund’s design disadvantaging business support, research and innovation.

South West

• PR said the approach has been guided by strategic direction formulated in preceding years and is aligned to existing regional strategies.
• He stated that £130m would be supporting ‘anchor projects’ across the local authorities in the region, while grant rounds were open for external sectors. Funding in the South West was approaching full commitment.
• PR added that monitoring processes have been built in so data on the progress of the SPF in the South West would be available soon. He added the region would also be moving Multiply funding into the SPF People and Skills priority.

South East

• SG said funding was supporting 10 local investment plans as well as the Cardiff Capital Region to support cluster development and tourism.
• SG noted that £14m had been spent in the first year which was 39% of the year 1 allocation and every South East council has open grants for external sectors. RCT, for example, has committed £4.5m to local community groups.
• He added that Multiply progress had been more challenging with uncertainty remaining over final allocations and flexibility, but 80% of core SPF year 1 funding totalling over £60m had been allocated as well as 76% of Multiply funds (£16m).
• For year 2 of the SPF, SG said there would be £101m to spend across the region subject to a carry-forward request and that local authorities would be showcasing funding opportunities for the public, private and third sectors across the region.
• SG added that challenges in delivering the SPF remain due to delays in receiving approval for the carry-forward request and year 2 grant determination letters. These factors placed a level of financial risk on local authorities.

In response to the local government update, members made the following comments:

• Universities across Wales were now at various stages of redundancy rounds and the withdrawal of services and programmes due to the loss of EU funds and the lack of accessible replacement.
• Universities were focussing on UK Innovation funding opportunities. The loss of EU funding administered by the Welsh Government for RD&I will have the long-term impact of moving this sector into the UK Government’s space which is likely to be more challenging.
• Third sector experience varies. With funding decisions expected soon, it’s important that unsuccessful organisations receive good communication from local authorities.
• Vital that some programme level evaluation is available soon so that good and bad practice can be picked up.
• Can data on funding distributed to external sectors be made available, so a clear comparison can be made on how much each sector has accessed?
• It would help if delivery could be extended into 2025 otherwise for external projects only around a year of delivery will take place.

Local government representatives made the following comments in response to the points raised:

• The SPF is not of the same scale or scope as European Structural Funds. It isn’t going to work for large-scale strategic projects led by Higher Education.
• Year 1 project lists are being published. Sectoral analysis can be made available.
• Lessons are being learned throughout the process. While the SPF has not been without its difficulties, stakeholders are committed to making the best of it.

The Chair invited Alison Sandford (AS) to provide an update on the OECD’s ongoing project with the Welsh Government to support regional economic development.

AS noted that the OECD had recently visited the Welsh Government and held focus groups in the South East and Mid Wales as part of their information gathering.

Good feedback has been provided by stakeholders and further sessions with North Wales and South West Wales will take place in September prior to a final series of workshops across the regions and a multi-stakeholder event at the end of October.

The Chair invited Geraint Green (GG) and Baudewijn Morgan (BM) to provide an update on the Welsh Government’s Agile Cymru programme and the latest developments regarding UK involvement in the EU’s Horizon Europe programme.

GG said that Agile Cymru was supporting the Welsh Government aim of an outward facing Wales by supporting Welsh organisations to develop economic links with targeted international regions.

He noted the approach had been set out in the Framework for Regional Investment, but with the UK Government denying the Welsh Government access to replacement funding, Agile Cymru was currently operating at a smaller scale than previously hoped.

GG added that Agile Cymru was making seed funding available for Welsh organisations to develop economic co-operation in the Irish Sea Space as well as important EU regions and Oita in Japan. He noted that an Irish Sea Framework had been published this year to guide co-operation between stakeholders in this space and that the Welsh Government was in discussions with the Irish Government about longer-term options.

GG also said that expanding Agile Cymru opportunities to additional global regions was being explored with the Welsh Government’s International Relations department.

BM said that the UK and EU had agreed a deal in principle for the UK to formally associate to Horizon Europe, but not yet in practice so negotiations were ongoing.

The UK is currently in pre-association status, so is paying for access to the programme in the same way, for example, New Zealand is.

BM said the UK Government has earmarked £14.6bn to spend on Horizon Europe or a domestic alternative by March 2028, so Welsh organisations should continue to develop ideas and engage collaboratively with Horizon projects.

He added that support for Welsh organisations interested in engaging with Horizon Europe was available through the Welsh Government.

The Chair invited Alison Sandford (AS) to discuss refreshing the Framework for Regional Investment to support planning for the next phase of regional investment.

AS noted it’s been three years since the Framework was published and there had been many economic changes since then that need to be considered such as the impact of the pandemic, supply chain issues and the employment picture across Wales.

With the SPF winding down at the end of 2024 and a General Election due in the next year, we need to refresh the Framework to ensure it reflects current challenges, needs and opportunities.

AS said that work on the refresh with Welsh Government and external stakeholders would begin soon and invited Forum members to offer any early observations so they could be taken into account.

AS added that more structured engagement would take place over the coming months. This was welcomed by attendees.

The Chair thanked members for attendance and ongoing contributions.

No further business was raised and the Chair advised that the next meeting would take place during the Autumn.

Chair

Huw Irranca-Davies MS

Members

Eirlys Lloyd (Chair, Wales Rural Network)

Amanda Wilkinson, Director, Universities (Wales Higher Education)   

Claire Miles, Mid Wales Regional Engagement Manager, Ceredigion County Council (Growing Mid Wales Partnership)

Tim Peppin, Director of Regeneration and Sustainable Development (WLGA)

Lowri Gwilym, Team Manager – Europe and Regeneration (WLGA)

Rhianne Jones, Lead Specialist Advisor EU Exit and Land Management (Natural Resources Wales)

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

Matt Brown, Director of Operations, WCVA (Third Sector Partnership)

Paul Butterworth, CEO (Chambers Wales)

Cllr Dyfrig Siencyn, Ambition North Wales (North Wales Partnership)

Alwen Williams, Portfolio Director, Ambition North Wales (North Wales Partnership)

Professor Rachel Ashworth, Dean and Head of Cardiff Business School, Cardiff University (Future Generations Commissioner)

Simon Gale, Rhondda Cynon Taf County Borough Council (Local Government)

Carwyn Jones-Evans, Ceredigion County Council (Local Government)

Paul Relf, Swansea Council (Local Government)

Dylan Rhys Griffiths, Gwynedd Council (Local Government)

Welsh Government attendees

Peter Ryland, WEFO – CEO

Geraint Green, WEFO – Head of Programme Management (European Social Fund and European Territorial Co-operation)

Alison Sandford, WEFO – Head of Policy and Partnership Working

Mike Richards, WEFO – Communications Manager

Baudewijn Morgan, WEFO - Head of Energy and Energy Efficiency/Horizon Europe Branch

Sarah Govier, Welsh Treasury – Head of Intergovernmental Relations

Claire McDonald, Business and Regions – Deputy Director, Economic Policy

Sam Huckle, Head of Delivery and Operations – Employability and Skills