Written Statement: Levelling Up Fund

Yesterday, the UK Government announced its plans to bypass the devolution settlement and directly allocate funding for regional and local development in Wales via a Levelling Up Fund, directly counter to the expressed position of the Senedd and directly contrary to what was announced at the 25 November Spending Review when the Chancellor said the £4 billion commitment in England ‘will attract up to £0.8 billion funding for Scotland, Wales and Northern Ireland in the usual way’.

It is important to highlight that none of this is new money being allocated to Wales by a Westminster Government which is serious about the levelling up agenda. This is the UK Government taking funding that would previously have been allocated to Wales to spend in line with the priorities this Senedd – elected by the people of Wales – has identified. This means decisions made by Whitehall departments with no history of delivering projects within Wales, no record of working with communities in Wales and no understanding of the priorities of those communities. In practice, this will mean that the UK Government is taking decisions on devolved matters in Wales without being answerable to the Senedd on behalf of the people of Wales. 

Furthermore, with £800 million for Wales, Scotland and Northern Ireland, spread over four financial years, it would probably represent little more than £50 million each year for Welsh projects – a fraction of the funding we have lost as a result of no longer having access to the Structural Funds. Moreover, in contrast to ‘the usual way’ Barnett consequentials are allocated, none of this money is ring-fenced to Wales.

Our Framework for Regional Investment, published in November 2020 and co-produced with our stakeholders, outlined our clear priorities for Wales, using a robust evidence-based approach and a transparent governance structure. We have had no information regarding how the Levelling Up Fund will work in practice and how the UK Government will demonstrate transparency, engagement with stakeholders and a genuine desire to level up across the UK. A prospectus on the Levelling Up Fund is expected to be issued early next month, just weeks before spending begins.

We now face the prospect of a centralised, Whitehall-led approach instead of a regionalised, made-in-Wales approach. Our Framework on the other hand, developed in partnership with stakeholders and informed by the world’s leading authority on multi-level governance, the OECD, will meaningfully transfer power, funding and responsibility to regional entities that fully understand the needs of their communities and who will ensure that local communities can hold those decision-makers to account.

It is important to remember that this UK Government has an appalling record on providing Wales with even a fair share of UK spending, let alone the kind of funding needed to ‘level up’. Two of the main levers for levelling up are investment in Research and Development and rail Infrastructure which remain reserved to Westminster. In both areas, Wales has continually been short changed.  If the UK Government were serious about their levelling up agenda for Wales, they would focus on redressing their historical failure to invest adequately in Wales. Instead, the UK Government is going out of its way to take money away from Wales and pick a needless constitutional battle to weaken devolved powers in the middle of a global pandemic.

The UK Government’s fixation with undermining democratic devolution is driving a cynical attempt at rebranding existing spending as new, and rolling back progress on a model of regional development that will empower local communities and create jobs and growth across Wales.