It is fair to say that the “levelling up” agenda has dominated the news recently. This week, we will explore how it will impact on us here, in Wales.
Only last week, Rishi Sunak, one of two Conservative candidates running for UK prime minister caused controversy for saying that he had changed public funding formulas to divert money away from essentially, deprived urban areas to “funnel” them into more affluent towns to ensure that they receive the “funding they deserve”.
While most of us have heard of the concept of “levelling up”? What does it mean? Along with the Brexit negotiations, Boris Johnson made the “levelling up” agenda a centrepiece of the 2019 General election. The purpose of levelling up is to ensure that communities – particularly, deprived communities – do not get left behind as a result of social and economic inequalities.
The aim is to plough funding into deprived communities in order to achieve these objectives.
However, what will be the likely impact of the levelling-up agenda in Wales?
According to Senedd Research published on the Welsh Parliament website, “levelling-up” funds will be distributed through the Shared Prosperity Fund (SPF) and Community Renewal Fund (CRF), which replaces European Funding that Wales and other areas across the UK previously received from the European Union.
While the Welsh Government has been asked to facilitate delivery of the funds and to develop investment plans, the UK Government wants UK SPF funding to be delivered in such a way that it bypasses Welsh Government – something which has been branded an “assault on Welsh devolution” by Minister for Economy, Vaughan Gething.
By bypassing the Welsh Government, the UK Government is likely to duplicate work, funding and projects that are already being undertaken by a consortium of Local Authorities and Social Enterprises working in partnership with Welsh Government to address economic inequalities.
Wales is due to be allocated £585 million through UK Government Funding between April 2022 and March 2025 – an amount the UK Government claims matches its’ commitment to replace EU funding.
However, analysis published by the Welsh Government shows that Wales would have received over £1.4 billion of EU Funding between April 2021 and March 2025, which means that the allocation of the Shared Prosperity Fund and Community Renewal Fund may actually result in a shortfall for Wales of £772 million.
To illustrate the point, according to ICAEW Insights, the first round of levelling-up funds provided just £120 million for projects in Wales. Over the same period, Wales would have received £375 million through EU structural funds.
ICAEW notes that Wales in particular is “experiencing a significant funding shortfall despite its acknowledged significant needs”.
As mentioned in previous columns, Welsh communities are amongst the poorest in the UK. According to Office for National Statistics published in 2019, the Central and Gwent Valleys were amongst the ten poorest areas in the UK, and gross domestic product per head of population in Wales was the second lowest in the UK at £23,866.
It appears that the benefits of the UK “levelling-up” agenda for Wales will be questionable at best, given the potential for duplication of projects and resources, and a significant shortfall in funding.
Yes Cymru Milford Haven contends that the only way to get to grips with addressing social and economic inequality in Wales is for Welsh Government to be in charge of its own public spending programmes through full taxation and spending powers through independence.
This is an article written by Maria Pritchard of Yes Milford Haven and published in the Pembrokeshire Herald newspaper on 19.07.2022