Community Renewal Fund and Levelling Up Fund in Wales — [Christina Rees in the Chair]

– in Westminster Hall at 11:10 am on 8th June 2021.

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[Christina Rees in the Chair]

Photo of Christina Rees Christina Rees Labour/Co-operative, Neath 2:30 pm, 8th June 2021

I remind hon. Members that there have been some changes in practice to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will be suspensions between each debate. Members participating physically and virtually must arrive at the start of debates in Westminster Hall, and they are expected to remain for the entire debate. I must also remind Members participating virtually that they are visible at all times, both to one another and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address, which is westminsterhallclerks@parliament.uk.

Members attending physically should clean their spaces before they use them and when they leave the room. Mr Speaker has stated that Members must wear masks in Westminster Hall unless they are speaking. I also remind Members that those who are sitting in the Public Gallery should move to the horseshoe just before they are called to speak. If Members sitting around the horseshoe could kindly facilitate that, that would be fine.

Photo of Ruth Jones Ruth Jones Shadow Minister (Environment, Food and Rural Affairs) 2:31 pm, 8th June 2021

I beg to move,

That this House
has considered the Community Renewal Fund and Levelling Up Fund in Wales.

I am very pleased to serve under your chairmanship for the first time, Ms Rees. I thank my hon. Friend Gerald Jones for helping to secure this important debate, and Mr Speaker for the opportunity to lead it. The debate gives the House the opportunity to address the broken promises made by Tory Ministers and the empty words of the Prime Minister, who has done nothing but let Wales down. Most important of all, it gives us all a chance to give voice to the thoughts, concerns, needs and wants of the people of Wales. I know my colleagues on this side of the House agree with me, and I suspect that many on the other side do, too, because funding for our communities is vital and much needed, but it is crucial that the funding is transparent, fair and balanced. Its distribution must not be another example of doing to people; we must focus on doing with people. As things stand, the levelling up fund and the community renewal fund fail on both those counts.

The levelling-up fund and the community renewal fund pit nations such as Wales, Scotland and Northern Ireland against the many regions up and down England. That simply is not good enough. Is it any surprise that the constituencies represented by Cabinet Ministers have received funds ahead of other parts of the United Kingdom? That is what happens when control is left in the hands of Ministers in Whitehall rather than in the hands of local communities up and down the country.

The so-called levelling-up fund will see decisions made in Whitehall rather than Wales, and will be driven by Departments with no history of delivering projects in and across Wales, no record of working with communities in Wales—north, south or mid—and no understanding of the priorities of those communities now or in future. That is why the First Minister of Wales, my right hon. friend Mark Drakeford MS, was correct to say that the Tory attempt to level up the economy in Wales is, simply put,

“a plan made for Wales – without Wales”.

That simply will not do.

I am a very proud member of the Welsh Affairs Committee, where we heard evidence on this subject just a few weeks ago. We heard from four council leaders across Wales, the Minister for Economy in the Welsh Government, the Minister for Regional Growth and Local Government, the Under-Secretary of State for Wales, and the director of policy, cities and local growth unit—quite a mouthful. Some key themes emerged from that important evidence session: there is not enough money in the pot to replace what Wales currently receives from the EU; there has been insufficient communication; the bidding criteria are not clear, and the mechanisms to decide on successful bids are submerged in confusion and chaos; the element of competitiveness is unwelcome, and Welsh areas are pitted against not just other Welsh areas but England, Scotland and Northern Ireland.

Those of us living and working in Wales prefer to work collaboratively to get the best for our communities, rather than compete aggressively to win small amounts of funding. Another key theme we found in our evidence session is that the timeline is too short; the deadline for bid submissions is impossibly short. Next week is the deadline for the very first round of bids; that means that councils have to submit shovel-ready projects rather than the most important and useful projects. That is not the best way of working.

When speaking to our Committee, Vaughan Gething made it abundantly clear that the Welsh Government had effectively been cut out of the bidding process completely, and that relationships with the Westminster Government were in a very cool phase at present. But the final part of our evidence session was perhaps the most concerning, as we heard two Government Ministers give different accounts of the bidding process and how the successful bids would be judged. The Under-Secretary of State for Wales was clear that he expected the Wales Office to be involved in the scrutiny of bids, but the Minister for Regional Growth and Local Government was adamant that the Wales Office would not be involved, but that his Department would be setting up additional teams of people in Wales to get involved in the process. I am still not clear why this additional layer of bureaucracy is necessary.

The levelling-up fund money is not new money. If it was not being funnelled through this fund, it would have been allocated to Wales through the Senedd, the democratically elected Parliament of the people of Wales, and it would have been allocated in accordance with the priorities of the Senedd, decided by the people of Wales. However, rather than respecting democracy and looking to work with the Welsh Government, Tories in Westminster have decided to trample over our democracy and have by-passed the Senedd completely. That is probably why, at the most recent opportunity the people of Wales had to express their view, they re-elected their Welsh Labour Government for a record sixth term of uninterrupted government. This is true to form for the Tory Ministers on the other side of the House, because they ride roughshod over democracy by taking decisions on devolved matters in Wales and remove most means of being held accountable by creating a system in which the people of Wales will have no say. It is unacceptable.

It is clear to me, and I know to many on this side of the House, that the way this whole sorry affair has been handled shows that the Tories know they have lost the trust and support of the people of Wales. On taking office, the Prime Minister made himself the Minister for the Union. Far from unity, every decision he has made and every step he has taken has sown discord and disunity across our country. As each day passes, the situation and future of the Union grow ever graver. I say this with no relish, but with increasing fear and concern for our Union.

The strong ties of family, faith, support, solidarity and togetherness that bind this Union are continuing to fray because of the failure of Tory Ministers to recognise that unions are formed of voluntary, consenting parties that need and deserve respect. Importantly, as I have already indicated, this Union is made up of four equal and proud partners. Nobody disagrees with the creation of the means to support and empower our communities, by using these funds, but as is so often the case with this Government, it is how it is done—or not done.

These funds could have been a step towards greater, more equal co-operation between Whitehall and the devolved Governments in Cardiff, Belfast and Edinburgh, but it has not happened. That is why I call on the Minister today to give us a reasoned explanation of what is actually going to happen, because we need to know and we need to know now.

The Secretary of State for Wales is a decent man, but it is a matter of regret that his decency has not stopped him from going along with the Prime Minister’s dismissive approach to the Welsh Government, the Senedd, devolution and the devolution settlement. This sits at the door of the Prime Minister, and it is time that he steps up or stops letting Wales down.

Photo of Christina Rees Christina Rees Labour/Co-operative, Neath

If Back-Bench speakers could confine themselves to five minutes, we should get everyone in. The Opposition spokesperson can speak for 10 minutes, the Minister can speak for 10, and Ruth Jones will have time at the end.

Photo of Stephen Crabb Stephen Crabb Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee 2:38 pm, 8th June 2021

It is a pleasure to serve under your Chairmanship for the first time and to follow my colleague on the Welsh Affairs Committee, Ruth Jones. I start by saying clearly that I welcome these funds. I welcome these new pots of money that have been created to achieve, we hope, good and lasting things in Wales and in our constituencies. I welcome the design of the funds, the commitment on the part of the UK Government and the vision that lies behind the funds—what they actually speak to and represent. It is a vision of a fairer, more balanced economy right across the whole United Kingdom.

The theme of an unbalanced, lopsided economy is one that we have talked about a lot over the years as Welsh Members of Parliament, recognising that Wales remains one of the poorest parts of the whole United Kingdom, recognising that other nations and regions of the United Kingdom seem to have been able to power ahead much more effectively with economic growth and prosperity creation. Too often in Wales, it feels that we are stuck and have been left behind. Certainly, the statistics seem to demonstrate that. I welcome the vision that the Government have announced and outlined, and the way that the funds give meaning to that.

On the point made by the hon. Member for Newport West about the devolution settlement, I do not believe it was ever part of the devolution vision originally sold to the Welsh people 20 years ago that a sort of Berlin wall would be created to stop the UK Government spending money for the benefit of its citizens in the devolved nations. I do not believe that was ever part of the original devolution vision.

When I was Secretary of State for Wales, there was never a shortage of Opposition MPs knocking on the door of the Wales Office asking, “Are there any pots of money available from UK Government to help schemes and projects in individual constituencies?” That was even when those projects and schemes touched on devolved areas. For the first time, we have funding streams available that complement, but do not compete with, what the Welsh Government are trying to do. As a Welsh Member of Parliament, I see that as a healthy thing.

I believe leaders of local authorities such as mine, and others from which we heard evidence at the Welsh Affairs Committee two weeks ago, welcome the opportunity for engagement with UK Government and what these funds bring for our communities. More direct contact between Welsh local authorities and UK Government is healthy. Again, it was never part of the devolution settlement sold originally to the Welsh people that local government in Wales should become a no-go area for UK Government. It is surely healthy for UK Government to have direct and meaningful relationships with local government. That is not to compete with the Welsh Government or ride roughshod over the devolution settlement but to create that healthy connection.

The Minister and I have talked before about post-Brexit funding, the successor to EU funds, and the need for better-quality projects and investment in Wales. We have had 20 years of EU funding, and it is not always obvious what that funding has delivered for our communities. I am not saying that very worthwhile projects have not been supported—of course they have been—but it is difficult to point to clear-cut examples of EU funding for projects and investment that has moved the dial, helped create better, more balanced growth and better-quality, higher-paid jobs in Wales, and made that kind of step change. I would emphasise to the Minister that this new generation of funding needs to support those better-quality projects and investments. The greater involvement of local authorities can help foster that, because local authorities on the ground often have the best knowledge of what is going on in their communities.

My final point is about my community in Pembrokeshire. I have been working with the local authority on a bid for this funding, focusing on town centre regeneration in Haverfordwest, which I hope is successful. Town centres need to do different things in future and not rely as heavily on retail as they did in the past. Covid has provided a catalyst for change in our communities. The bid we are working on could represent a new future for Haverfordwest town centre. It could benefit from tourism and our cultural heritage.

Photo of Chris Elmore Chris Elmore Opposition Whip (Commons), Shadow Minister (Scotland) 2:44 pm, 8th June 2021

It is a pleasure to serve under your chairmanship, Ms Rees, I think for the first time. I congratulate my hon. Friend Ruth Jones on securing the debate and covering in such detail some of the challenges of the levelling-up fund. In similar fashion to Stephen Crabb, I say to the Minister and all Conservative Members present that I welcome any funding that brings investment into my Ogmore constituency. I am not against funding coming into any of my communities.

I happen to represent some of the most economically deprived parts, not just of Wales but of the UK. I am well aware that investment is needed in my constituency. That investment could be in jobs, growth and physical regeneration, including around the town centre. In my constituency there are smaller towns in many of the valleys. Historically, they were full of hustle and bustle because of industry that has now left those communities, so they need the investment that the Welsh Government have provided until now, with European Union funding, but which has also come directly from the two local authorities that my constituency sits in.

I am not happy with the process. I think that it should be decided within the Welsh Government, because that is the system that has been in place for EU structural funding since 1999, and we should respect the devolution settlement. However, I am realist. I am not in government in Westminster, so I genuinely want to work with the Wales office and Housing, Communities and Local Government Ministers to ensure that investment comes to my constituency.

The first bidding round is on 18 June. Two local authorities, as I have set out, cover my constituency, and a third borders my constituency—I can see Alun Cairns looking straight at me on a screen. I have been lobbied by officials in Bridgend, Rhondda Cynon Taf and the Vale of Glamorgan authorities about a possible bid in my constituency covering all three county areas. This is a very exciting and positive bid that could bring about meaningful change and regeneration to the second largest—I represent several towns; my constituents would argue which is the second largest—town in my constituency, to bring about meaningful investment that could be of real benefit to the constituencies of Dr Wallis and of the right hon. Member for Vale of Glamorgan.

However, there is confusion. It is not clear which bid I would support, because my authorities wish to put in other bids. Officers have no relationship with HCLG officials, because there has been 20 years of separation following devolution. They are therefore starting from scratch on relationships and conversations. When, as MPs we ask Ministers, either in HCLG or in the Wales Office, who is leading on what, there is confusion. There is not a straightforward answer.

At the last Welsh questions, I asked the Secretary of State for Wales whether he could try to explain the process, and I then wrote to him. Despite various HCLG Ministers, including the Under-Secretary of State for Housing, Communities and Local Government, telling me that there would be two further rounds of bidding, no dates are available for those rounds. The Secretary of State told me that there would possibly be only one additional round of funding in the comprehensive spending review for the next round, so what happens to the third round? What are the dates towards which local authorities should work to ensure that they can put in those bids?

Alongside that, we have the community renewal fund. As I mentioned, Ms Rees—you know my constituency very well indeed—my seat sits in the RCT and Bridgend County Borough Council area. RCT is part of the community renewal fund priority bidding area, but Bridgend County Borough Council is not. Despite the deprivation—the Minister and I have corresponded about this—and the challenges facing those communities, it is not seen as a priority area for the UK Government, and I have still not got to the bottom of why neighbouring authorities, including seats with fewer areas of deprivation and fewer challenges in skills and growth, have been prioritised, but mine has not. I know that my hon. Friend Wayne David will make similar points about his county area—as, indeed, will my hon. Friend Gerald Jones.

In closing, I have a series of questions. We rarely have an opportunity to question the Minister in such a direct way. Could I have the dates for rounds 2 and 3 of the funding bids for my local authority? In written answers I was told that they were not available. What happens to priority bidding if there are multiple authority bids from two or three authorities? Will there be second and third funding rounds? After priority bids, of which there is one, the Welsh Secretary says that other bids can be supported in the usual way. Will the Minister set out what the usual way is? I have yet to find an answer.

Photo of Alun Cairns Alun Cairns Conservative, Vale of Glamorgan 2:49 pm, 8th June 2021

It is a privilege to serve under your chairmanship for the first time, Ms Rees, like many other Members present. I congratulate Ruth Jones on securing this important and timely debate before 18 June, the deadline for the first round.

I say warmly and enthusiastically that the levelling-up fund is welcome. It is something that I have sought to work with and work on for many years, from the time of the referendum on leaving the European Union, and I am excited and I congratulate not only MHCLG but also the current Secretary of State for Wales and the Wales Office for securing this and seeing it through right to the very end. As my right hon. Friend Stephen Crabb highlighted, there are many MPs from across the House who would come to see the Secretary of State at various stages, seeking support for a range of projects but maybe not fully understanding that the lack of capacity to spend and the lack of a budget—both resulting from the legal constraints at the time—meant that the Wales Office could not help. Now it can help, working with colleagues at MHCLG.

We should also remember that levelling up was the key theme, along with getting Brexit done, during campaigning for the last general election. I therefore reject the complaints from some Opposition Members. It is clear that the Government secured a majority on their levelling-up agenda —this is a key part of it—together with getting Brexit done, given that the then-European aid programmes obviously have come to an end and this naturally and logically follows from that.

It is telling that the communities that often received the largest amounts of European aid were some of the communities that voted in the strongest numbers to leave the European Union. That tells us something—that the programme, as it was, was not working. We know that more than £4 billion has been spent over almost 20 years of European-aided programmes in Wales, but clearly, sadly and unfortunately, Wales remains the poorest part of the United Kingdom. Therefore, a fresh approach is welcome.

I am disappointed that many colleagues on the Opposition Benches seem to welcome funds when they come from Europe but do not necessarily welcome them as much when they come from Whitehall. This is an opportunity to bind the Union together, and to recognise that UK taxpayers support UK residents wherever in the United Kingdom they live. My constituency received very little, if anything, in European aid because it did not fall into west Wales and the valleys. Some smaller sums were available, but certainly not transformational funds that would make a world of difference, like the opportunity offered by the levelling-up fund. I welcome it, I believe my constituents strongly welcome it and I congratulate the Vale of Glamorgan local authority on its engagement with the process in seeking to meet the 18 June deadline.

Barry, the largest town in my constituency, has some of the most deprived communities in Wales but, because of the structures that the Welsh Government and the European Union previously introduced, Barry and those communities were not able to benefit from additional aid outside the Welsh block grant. Now, under the levelling-up fund, they can. Barry has turned a corner in the last decade and exciting developments are taking place. However, the levelling-up fund offers us the opportunity to take it to the next level.

The proposal that we are looking to bring forward is a marina, which will complement so many other exciting projects that are taking shape. That exciting project had to be brought together within quite a short time. I hope the Minister will recognise that authorities in Wales tend to be smaller, and therefore their capacity to develop bids within a relatively short period is not as great as that of some authorities elsewhere in the UK. Similarly, some authorities, particularly those in south-east or eastern parts of Wales, are not used to bidding for such large infrastructure projects or schemes. They lack experience and therefore will need extra support.

Finally, it would help if the Minister would underline when the next round will open and whether, if a bid is unsuccessful on this occasion, positive feedback may be given to make it appropriate for the next round of funding.

Photo of Wayne David Wayne David Shadow Minister (Foreign and Commonwealth Affairs) 2:54 pm, 8th June 2021

It is a pleasure to serve under your chairpersonship, Ms Rees, and I warmly welcome this afternoon’s debate. Like Bridgend county borough, Caerphilly county borough contains some of the poorest communities in the whole of the United Kingdom. Lansbury Park in Caerphilly, and the town of Bargoed—also in my constituency—are not included on the Government’s priority list of communities that should receive funding from the community renewal fund. That is because Caerphilly borough is not on the Government’s priority list. Equally, in the constituency of my hon. Friend Gerald Jones, Deri, Fochriw, Rhymney, New Tredegar and many other poor communities are to be excluded because Caerphilly county borough is not on the priority list.

However, the Chancellor’s constituency of Richmond in Yorkshire is included on the list. Many other areas that are obviously doing relatively well, thank you very much, are also included on that list. The reasons for that list being selective may be political, but I will leave that to one side—Members may come to their own judgment on that. The technical reason for Caerphilly county borough not being included is the relatively high travel-to-work rates from that borough: for example, people are travelling to Cardiff for work in significant numbers. However, that gives the incorrect impression that the borough as a whole is faring quite well. The reality is that there are parts of the Caerphilly borough that are far from prosperous, and those areas clearly need continuing support.

These exclusions are worrying as regards the fund, but to be frank, the community renewal fund is small beer. The shared prosperity fund is more important, because that is the fund that will effectively replace the European Union’s structural funds. However, we are told that the community renewal fund is the precursor to the shared prosperity fund, so I should like to ask the Minister three questions today.

First, the Minister has said very clearly that the Welsh Government and central Government should work together. Can the Minister commit himself to work with the Welsh Government so that in Wales, the criteria for the allocation of resources under the shared prosperity fund are drawn up jointly by both Governments?

Secondly, is it the Minister’s aim for areas such as Caerphilly, which benefited substantially from the EU’s structural funds, to also benefit from the shared prosperity fund? If the Government believe—as they say they do—that resources should be allocated on the basis of need, surely there should be a continuity of funding, and comprehensive criteria should be used to determine the actual need in those areas.

My third question is whether the Minister will commit to visiting my constituency, and the town of Bargoed in particular, to see for himself and to talk to local people about what the needs of the community are. That would be extremely important, so that an accurate assessment can be made and so that funds can genuinely be allocated on the basis of where they are needed the most. I very much hope that the Minister takes up my kind invitation: he can be assured of a warm welcome in the valleys.

Photo of Virginia Crosbie Virginia Crosbie Conservative, Ynys Môn 2:59 pm, 8th June 2021

It is a pleasure to serve under your chairmanship, Ms Rees, and to speak in this debate on the levelling up and community renewal funds in Wales. I, too, congratulate Ruth Jones on having secured this debate.

My constituency of Ynys Môn is a priority area for the community renewal fund and a category 2 area for the levelling up fund, and I welcome the opportunity given by the UK Government to bid for these two funding proposals. The funds echo the assessment that my hon. Friend Danny Kruger made in his report, “Levelling up our communities: proposals for a new social covenant”, that such funds should be

“more local, more human, less bureaucratic”.

These funds seek to establish a relationship between the UK Government and local communities. They hand the responsibility for selecting and championing local projects to those who can best represent the needs of a local community—the local authorities and Members of Parliament who represent them.

Ynys Môn has been battered by years of underinvestment from the Welsh Labour Government and has one of the lowest gross value added figures in the country, so when the funds were announced I was inundated with requests, applications and ideas from my constituents. The ideas came from local enterprises, small local charities and individuals, as well as from well-established, wider local community groups. I was already well aware of some of the ideas, but others came out of left field and left me excited about the level of local engagement suddenly activated by these new funding pots.

They offered a range of exciting solutions to local concerns: arts and amenity centres, such as the Ucheldre Centre; local and cultural establishments, such as the Holyhead Maritime Museum; enterprises specialising in bringing employment and regeneration, such as Môn Communities Forward; groups such as PIWS, which wants to facilitate visitor access for the disabled; and many more. There are opportunities that clearly define themselves as falling into the community renewal fund because they are primarily revenue funding; others are candidates for levelling up because they desperately need capital spend and many fall into both camps.

I was delighted to speak to staff at the Isle Of Anglesey County Council about how best to work with them on developing the bids, when to put forward a levelling-up fund proposal and how best to assess which ideas should go forward. It was a great opportunity to engage with Annwen Morgan, the chief executive, and Llinos Medi, the leader of the council, about how the UK Government could support them in an arena that had previously been the remit of EU funding criteria.

I know that rural communities can find it difficult to find the resources to put together bids for funding, so I was particularly pleased that that has been taken into account. The UK Government will provide the Isle Of Anglesey County Council with £145,000 in capacity funding to help it to deliver excellent bids. I, too, offered my own resource to assist in any way that I could. My council is now at the stage of assessing bids for the community renewal fund and I am meeting council officers on Friday to carry out the assessment of which bids will go forward for the 18 June deadline.

Looking to the future, the community renewal fund is the predecessor to the shared prosperity fund, so I expect that feedback from it will inform the future structure of the shared prosperity fund. Similarly, the levelling-up fund criteria are not set in stone and will develop over time. I welcome these funds for all Welsh authorities, including my own. They strip away the old criteria imposed by the EU and apply a more localised approach. They provide funding to help under-resourced authorities develop bids that will stand out and achieve funding, and they encourage local engagement.

This country has had an exceptionally challenging 18 months and we have seen the very best of our communities going above and beyond to support each other. The community renewal fund and the levelling-up fund give the UK Government, local councils and Members of Parliament the opportunity to work together, to invest in and support the very heart of our communities in Wales.

Photo of Stephen Kinnock Stephen Kinnock Shadow Minister (Foreign and Commonwealth Affairs) 3:03 pm, 8th June 2021

It is a pleasure to serve under your chairship, Ms Rees. I congratulate my hon. Friend Ruth Jones on securing this vital debate.

In 2018, the all-party parliamentary group on the UK shared prosperity fund, which I am honoured to chair, set out our expectations of the SPF. One point that we wanted to make very clearly was that we fully accept, and indeed welcome, the transition from the EU role in the structural funds to the shared prosperity fund. We are completely agnostic on the source of the funding and the management of it. We are interested in outcomes and results, and that is what today’s debate is about. I ask colleagues on the Tory Benches, please stop propagating the myth that this is about sour grapes on our part. It is not. We all want the best for our communities. It would be helpful if Members stopped using that damaging rhetoric.

Then and now, our clear message was that it is not a penny less and not a power lost. We have urged Ministers to ensure not only that the EU development funding be replaced pound for pound, but that decisions be taken by those who know our communities best, rather than by remote control from Whitehall and Westminster. Fast-forward three years to this debate on what is effectively the pilot for the SPF—the community renewal fund—and unfortunately it is becoming increasingly clear that the APPG’s recommendations have fallen on deaf ears.

Our disappointment in the Government’s response is based on five central concerns. First, the Government’s use of spin, smoke and mirrors means that the announcements are not what they seem. Money is moved and funds are rebadged to give the impression of extra resources, but the reality is that there is no new money.

Secondly, it is clear that the programmes are being used for nakedly political purposes and not directed to communities with the greatest need. Perhaps the most egregious example of this pork barrel politics came when a chunk of the towns fund was siphoned off to the Chancellor’s wealthy constituency. Now we see the same shenanigans with the UK community renewal fund, which includes so-called priority areas such as Derbyshire Dales, Herefordshire and Richmondshire, yet excludes the likes of Caerphilly and Bridgend. It is precisely the same story with the levelling-up fund and there could be more trouble ahead. If the community renewal fund is anything to go by, the £1 billion shared prosperity fund will be a veritable bonanza of pork barrel politics for Conservative MPs.

Thirdly, the bidding process seems to have been designed to hinder effective delivery. Its competitive nature is not only inconsistent with the stated purpose of targeting on the basis of greatest need, but wastes precious local authority time and resources and is too short term. The community renewal fund is allocated money for only a one-year cycle, whereas the EU funding stream was allocated on the basis of seven years of funds to communities that fell below a certain level of deprivation. Will the Minister therefore please commit today to scrapping the inefficient competitive bidding process for the shared prosperity fund and replacing it with a system based on the strategic allocation of resources over a multi-annual period?

Fourthly, the Conservative Government’s centralised approach betrays the basic principle of devolution. Until recently, spending on regional and local economic development was a devolved matter, or, in the context of EU funding, undertaken by the devolved nations within a framework agreed between the UK and the EU. The Scottish and Welsh Governments are major players, with responsibility for agencies that play a big part in local and regional development. The UK Government must therefore bring the devolved Administrations into the heart of the decision-making process. The Welsh Labour Government know Wales, its economy, its needs and its people far better than a civil servant in Whitehall can ever do.

Finally, the delivery timescale of the community renewal fund and the levelling-up fund is frankly shambolic. Already overstretched council teams, who are dealing with the demands of a pandemic, are being asked to meet unrealistic deadlines with incomplete information on the funds. Neath Port Talbot Council has done a fantastic job in putting proposals together at the last minute, but it could better serve residents if it were given more time and information.

The terms “levelling up” and “community renewal” should have real meaning—to the constituents we represent, to the areas that have been hit hardest by 11 years of austerity, and to the industries and sectors that have been hardest-hit by the pandemic. Unfortunately it appears that, for the UK Government, they are little more than slogans.

Photo of Jamie Wallis Jamie Wallis Conservative, Bridgend 3:08 pm, 8th June 2021

It is a pleasure to serve under your chairmanship, Ms Rees, for the first time. I congratulate Ruth Jones on securing the debate. I agree with the comments that it is very timely, ahead of the 18 June bidding deadline.

It is also a pleasure to follow Stephen Kinnock, who made some great points, particularly on assessing the impact and delivery of the funds, as opposed to getting bogged down in where the money came from, who managed it and exactly what happened along the way. That is what my constituents care about. They want to see the regeneration of Porthcawl and of Bridgend town centre. They want this investment in their community for themselves and their families, and they are not interested in politics.

I draw the attention of Labour Members who said that they feel a greater role for the Welsh Government is needed to what is happening in Wales about freeports. It is a classic example of where the two Governments are supposed to be working together to deliver that fantastic initiative in Wales, yet we are well behind our counterparts in England because the Welsh Government cannot seem to come to the table to talk about basics. They say they want a greater role in the levelling-up fund and the community renewal fund, but how can they ask for that when they have so badly let down the communities across Wales when it comes to implementing the UK Government’s freeports policy?

I welcome these funds—both the levelling-up fund and the community renewal fund. They are opportunities for direct investment in communities across Wales and as the Member of Parliament for Bridgend, I am very grateful for them. That is because one thing that we need to remember is that Wales has two Governments—not one, or one in one place and one in another. It has two Governments that should work in parallel, delivering on their respective briefs.

The levelling-up fund was a key manifesto pledge that we made, and our levelling-up agenda is key and has been for some time. It is not a secret; it is not out of the blue. We have been talking about it for a long time and now we are finally going to deliver on it.

I will also talk about the involvement of MPs. Lots of comments have been made about who is best placed to make these decisions, support these bids and direct this funding. Actually, it is really great news that these funds will place some emphasis on what MPs have to say, and will encourage a greater working relationship and facilitate dialogue between MPs and their local authority. That surely counts for a lot when it comes to ensuring that the people and communities get what they are asking for.

The point made by my right hon. Friends the Members for Vale of Glamorgan (Alun Cairns) and for Preseli Pembrokeshire (Stephen Crabb) is that some of the areas in Wales that are currently in receipt, or that were in receipt, of the highest amounts of EU funding were the ones that voted for Brexit. That should not be lost on us, because when I was knocking on doors, speaking to constituents or receiving emails from them, it became clear to me that there was a huge disconnect, despite what people say, regarding the way those funds were managed. There was a huge disconnect between what people felt they needed in their village, town or community and what actually got delivered. Having a fund designed by the UK Government for the people of Wales, in which the local Members of Parliament are very active, is a very viable and good way of doing things.

As far as the community renewal fund is concerned, which, as we have heard, is the precursor to the shared prosperity fund, my hon. Friend Virginia Crosbie said that we want to see this system evolve, which is a fair comment, and that we want the Government to learn the lessons from that fund before the SPF is implemented. We also need to ensure that the formulas used to determine the priority groups are a little bit more transparent, as Wayne David highlighted; we perhaps need some more information from the Government on that. There were also comments that getting some clarity on the dates and details of the second and third rounds of bidding would be appreciated. I am grateful that the Minister is here today, hopefully to provide us with that clarity.

Photo of Craig Williams Craig Williams Conservative, Montgomeryshire 3:13 pm, 8th June 2021

It is a great pleasure to serve under your chairmanship, Ms Rees for the first time, I believe.

Like others, I welcome this debate and congratulate Ruth Jones on securing it. However, I think that there is some important context to it. I was won over by Stephen Kinnock—although I think we are all hon. Friends today in talking up Wales—on the importance of outcomes rather than governance.

The hon. Gentleman convinced me not to talk at length about this issue, but I will touch lightly on the setting up of Welsh European Funding Office, or WEFO. If we look at the comments from decades ago when that was funded, we see similar points to those being made in this debate today. There were similar criticisms of how WEFO was set up and how EU structural funds were being spent.

There are teething issues with new funds. I hope that the Minister will touch on them, go further with the dates and will explain exactly how the new arrangements will work. But there are some cheap political points being thrown around here, which do not do justice to what the hon. Member for Aberavon was talking about, namely focusing on the outcomes that this money is meant to achieve.

I will make one last point about WEFO. It is the fact that Wales qualified three times for the highest EU structural funds. Areas of eastern Europe that were just recovering from serious Communist rule recovered at a quicker pace than the Welsh Government and WEFO enabled many areas of Wales to do.

So the hon. Gentleman will forgive me and my constituents if we want to try something different this time; I hope that he will forgive me and my constituents if we look to the UK Government to get money directly into projects in our constituencies. We will be judged on the outcomes: I very much welcome that and I will give the Minister a hard time on outcomes and any commitments made about funding. If this was Barnettised, we would be getting less money now. That minimum 5% promise—I hope it is much more than that—is more than the Barnett consequential, so there are some cheap political shots.

I have been working and talking with my local authority, which has hugely welcomed the fund, the fact that it can engage directly with the UK Government and the breadth of funding that that will release over the longer term. It hugely welcomes the new funding pots to which it can go directly. Of course, it wants collaboration with the Welsh Government, and so do I, but that works both ways.

When the Welsh Government put money into broadband, I welcomed that. It is a reserved area, but we need to work together. When the Welsh Government opened foreign embassies and employed people around the world working on trade and investment—a reserved area—I welcomed that; we need to work together. However, the second the UK Government dare to send a Minister over the border or dare to create new funding pots for our constituents and businesses, there are outcries. That is not collaboration. The Welsh Government cannot have it both ways. They cannot invest in any area of policy they want and then cry the second the UK Government do so.

While my hon. Friend the Minister may be an English MP, I implore him to reflect on the invite from Wayne David to go and visit his constituency: he can also visit my constituency, because he is a UK Government Minister. That involves Wales, Scotland, Northern Ireland and England—I would prefer to see investment given in that order—and he is really a Minister who represents all four corners.

I will finish with just a hint of what this means to Montgomeryshire and the excitement felt on the high streets of Welshpool, Machynlleth, Newtown and especially any community that looks at the Montgomery canal. The Minister will be getting a bid—a fabulous, spectacular bid; one that stacks up, I am sure, and one that I hope he okays—to open the Montgomery canal back to the UK network. It is a great Union story, but it is also a huge opportunity for mid-Wales and for Montgomeryshire tourism, but one that I fear would not ever have happened if we did not have these funding pots and these new UK Government initiatives.

We will be judged on outcomes, and I have no doubt that at the next general election the outcomes of these pots will be absolutely central to votes in Wales. So, no pressure, Minister, but we will be watching. I seriously ask Opposition Members to examine their rhetoric and think about what they are asking for. They are not English MPs. We are all Members of the United Kingdom Parliament and they should expect both Governments —UK and Welsh—to invest in their constituencies.

Photo of Beth Winter Beth Winter Labour, Cynon Valley 3:18 pm, 8th June 2021

It is lovely to serve under your chairmanship, Ms Rees. I thank my hon. Friend Ruth Jones for securing this important debate.

Wales was the UK nation that benefited from EU funding most, including in my constituency of Cynon Valley, which is extremely deprived and has one of the highest rates of child poverty in the UK. It is extremely concerning, as others already illustrated, that these schemes will not provide a fraction of the funding and fall short of what is needed to replace what we had under EU funding in Wales. Yes, we all welcome the funding, but let us not pretend: it is a fraction of the funding that we had previously under the EU. “Not a penny less” is being translated to millions of pounds less by the UK Government, and that is after 10 years of brutal austerity that has had a devastating impact on communities in Wales. The funds are forcing us into a competitive bidding process, pitting local authorities against one another. That is not consistent with my understanding of “levelling up”, which, by its very definition, should target less prosperous areas. A far more effective way of boosting local economies would be through cross-border collaborative working, and that is not happening.

The methodology used to prioritise constituencies is seriously flawed. I cannot understand why deprivation has not been used as a measure for the levelling-up fund, and we have yet to see the methodology used to select the community renewal fund’s priority areas. As priority has not been assessed on a needs basis, prosperous areas have received extra funding—including the constituencies of both the Chancellor of the Exchequer and the Minister of Housing, Communities and Local Government—while deprived areas in Wales such as Bridgend and Caerphilly have been excluded, as colleagues have already said.

The timescale, as has also already been said, does not allow for strategic, creative or transformative projects to help local communities. The Tory Government have a proven record of supporting their pals and cronies, and I have serious concerns that the money will be used to bolster Conservative incumbents. The experience of the towns fund in England does not instil confidence in me. The fund, totalling £3.6 billion, went overwhelmingly to Conservative target seats, and when scrutinising the spending, the Public Accounts Committee said that the distribution had

“every appearance of having been politically motivated.”

I fear that the Government are more interested in electioneering than in making lasting improvements to our communities.

The shortcomings, confusion, lack of clarity, mis- information and—quite frankly—shambles of the entire process were highlighted at the recent Welsh Affairs Committee attended by me and other Members here today. We heard evidence from local authority leaders, the Welsh Government, and the UK Government. There was a clear discrepancy between the evidence and experience of those in Wales and what was being said by the UK Government. Yes, Welsh Government and local authority leaders want a collaborative and inclusive approach, but they clearly said that that has not been happening—I have a transcript. They want to work with UK Government, but they are being excluded from the process.

Another concerning issue that came out in the evidence was the lack of clarity over the roles and responsibilities of different UK Departments, especially in relation to decision making: what roles the Wales Office and the Department of Housing, Communities and Local Government would play. I would appreciate clarity on that issue from the Minister. That session really did raise more questions than answers. As a Committee, we will collectively pursue some of the issues that arose further.

The whole approach is, without a doubt, another example of UK Government riding roughshod over the devolution settlement. Decisions about Wales should not be made by Departments in Whitehall, which have no experience of delivering projects in Wales. We have a democratically elected Government in Wales, and they are best-placed to make decisions for Wales. I and many others in Wales do not trust the Tory Government to deliver change. We do trust our Welsh Government, as evidenced by the Senedd election results last month. I strongly urge the UK Government to take a collaborative, inclusive approach, working with the Welsh Government and local authorities to control the Wales levelling-up allocation, and it must be based on a principle of “Not a penny less, not a power lost”.

Photo of Robin Millar Robin Millar Conservative, Aberconwy 3:23 pm, 8th June 2021

It is a pleasure to serve under you, Ms Rees, in my first Westminster Hall debate. I congratulate Ruth Jones on securing it.

I start by saying that I welcome the UK Government’s vision for investment in Wales, their involvement in all parts of the UK, and their encouragement of a strong working relationship with the devolved Administration in Wales. I also welcome the timing of this debate as we transition out of Europe and out of a pandemic. Like Virginia Crosbie, I could list the many local projects and groups that have been eager for funding and that have contacted me for information about the lifeline given to them. I am reminded, however, of the tourist lost in the countryside who stops to ask a local person for directions. The local pauses and says, “If I were you, I wouldn’t start from here.” The sentiment is legitimate but the advice is unhelpful, and that is the case too—I am afraid—for much of what we have heard from Opposition Members in this debate. To make progress ourselves across this landscape, it is essential that we establish what is fact, and build our arguments from that ground. I hope to do just that with my contribution today.

First, we must acknowledge that sovereignty lies with the UK Government, here in Westminster. In recent weeks, we have heard other ideas and aspirations: that sovereignty is pooled, that it is between equal constituent parts of the UK, or that it would be even better if federated. The kindest word for these ideas is “aspirational”. It is not how things are.

The United Kingdom Internal Market Act 2020 and the mechanisms of financial transfer created within it, which will deliver the funds that we are discussing today, were established here in Westminster. When the Welsh Government sought to challenge the UK Government, Lord Justice Lewis, sitting with Mrs Justice Steyn, refused the application stating

“the claim for judicial review is premature” and noting that it was “unnecessary” and “unwise” for them to give a view on the Welsh Government’s arguments. So the first fixed point for our journey is that these funds are properly and legitimately conceived by the UK Government for the benefit of UK residents in part of the United Kingdom.

Secondly, I am sure we can all agree that decisions should be taken and functions delivered closest to where they will have their effect. That principle of subsidiarity balanced by pragmatism underpins localism and devolution. However, devolution of powers from Westminster to Cardiff Bay has not carried on beyond Cardiff to local authorities in Wales. What the Senedd has seen as good for itself has not extended to what it thinks is good for local authorities in Wales, including the administration of funds.

In 2020, the Welsh Government was the lead organisation for about 53% of the total EU funds awarded to Wales; Welsh local authorities were entrusted with less than 10% of project funding. By contrast, in England, just 7.4% of funds were handled by the UK Government, whereas local authorities were responsible for almost 37% of funds. That is not just my observation—the Welsh Local Government Association also knows it. Its “Manifesto for Localism” puts greater fiscal autonomy and flexibility for councils at the heart of plans for recovery from the pandemic. The second fixed point, then, is that the funds are consistent with the principles of subsidiarity, real devolution and trust in local decision-making.

My third and final point is representation. The cry goes up that money spent in Wales should be decided in Wales—that the true representation of Wales is in Cardiff. The fact is we are all here in a UK Parliament by the votes of UK residents. Anyone who suggests that we are not representative of Wales should think very carefully about what they are implying about their own legitimacy and the judgment of the residents who put us here. After all, turnout in the general election 2019 was 67%, but it was just 47% in the recent local elections in Wales.

At its heart, this debate is about trust, and not funding. I am here as a resident and representative of Aberconwy, trusted by its residents to influence the decisions made on their behalf in this place. I welcome the dialogue I am having with Conwy County Borough Council and I am excited by its vision. I cannot think of a single neighbour, resident or community in Aberconwy who will be upset by the offer of these funds, and I am confident of the positive impact the funds will have on the lives of those who live, work and play in Aberconwy.

Photo of Simon Baynes Simon Baynes Conservative, Clwyd South 3:28 pm, 8th June 2021

It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate Ruth Jones, a fellow member of the Welsh Affairs Committee, on securing this debate.

I strongly support the key principle that lies behind these two funds—namely, the UK Government’s commitment to levelling up the whole of the United Kingdom, all parts of the Union, to ensure that no community is left behind. A very important feature of the funds is that they involve decentralising power and working more directly with local partners and communities across Wales and the UK, who are best placed to understand the needs of their local areas and are more closely aligned to the local economic geographies to be able to deliver quickly on the ground. I am an MP for North Wales, which often feels forgotten by the Labour Welsh Government in Cardiff so, for me, this decentralised approach is particularly welcome.

I welcome the UK Government’s provision of an additional £220 million funding through the UK community renewal fund to help local areas prepare for the launch of the UK shared prosperity fund in 2022. I welcome the fact that the community renewal fund, which is largely revenue based, aims to support people and communities most in need across the UK to pilot programmes and new approaches, and that it will invest in skills, community and place, local businesses and supporting people in employment.

I have seen the benefits the levelling-up fund could bring to my own constituency of Clwyd South through the bid currently being prepared jointly by Wrexham County Borough Council and Denbighshire County Council, which focuses on projects along the Dee Valley, including the regeneration of the Trevor Basin, as well as improved travel connectivity and investment in Chirk, Llangollen and Corwen. It provides a unique opportunity for the councils to access funding from the UK Government to bring forward significant development and regeneration opportunities, which both councils have been developing since the inception of the 11-mile world heritage site in 2009, making the most of the Llangollen canal and steam railway.

The levelling-up fund is a game changer and will help to deliver a fundamental shift in aspiration, confidence and opportunity. That is all the more important to an area with a desire to emerge from the worst recession in living memory and a worldwide pandemic with a renewed vigour and determination to put the world heritage site where it belongs: at the heart of the visitor economy in the region and at the centre of the drive for prosperity in north Wales.

I am very pleased that at least £800 million of the total £4.8-billion levelling-up fund will be invested in Wales, Scotland and Northern Ireland, and that, for the first round of funding, at least 5% of the total UK allocation will go to Wales. That is as much as, if not more than, what would have been received through the Barnett consequentials. Further to this, of course, each of the 22 local authorities in Wales will receive £125,000 in capacity funding to help build their relationship with the UK Government and draw up top-quality proposals. Wales has proved to be at the leading edge of those councils putting forward proposals, with 13 out of the 22 local authorities in Wales having applied in the first round of funding—the highest percentage of any part of the Union.

The UK Government intend to create careers, not just jobs. Their objective is to make sure that wherever you are born and grow up, you will have a fair opportunity to succeed in life and do not have to leave your home town to find a good career.

In conclusion, levelling up is about not just the physical infrastructure of communities, but the social infrastructure, supporting local transport, high streets—[Interruption.]

Photo of Christina Rees Christina Rees Labour/Co-operative, Neath

The hon. Gentleman seems to be frozen and I do not think we will get him back.

Photo of Wendy Chamberlain Wendy Chamberlain Liberal Democrat Spokesperson (Wales), Liberal Democrat Spokesperson (Scotland), Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Work and Pensions) 3:32 pm, 8th June 2021

It is a pleasure to serve under your chairmanship, Ms Rees, and I apologise for my delay in making it to the Chamber. I congratulate Ruth Jones on securing this debate.

Stephen Kinnock said that we should be outcome focused, and I absolutely agree, but I also argue that good processes help to deliver good outcomes. The initial deadline of 18 June means there were 74 working days, in the context of responding to the pandemic, for local authorities to process what was needed and to make applications. That is clearly insufficient time. For the community renewal fund, the spending must be completed by 31 March 2022. Therefore, applications are limited to projects that are ready to go, rather than those that would take a longer time and arguably deliver better outcomes. I reiterate the point made by Alun Cairns: this disadvantages smaller local authorities that do not have the same capacity and will not have an ongoing programme of funding bids.

Previously, 40% of Welsh apprenticeships were funded by EU structural funds. The current funding will provide £220 million to the whole UK. Wales, as many Members have said, is guaranteed at least 5% of that, which is £11 million. I struggle to see how else that can be explained other than as a loss of over £300 million of funding to Wales. The prospectuses of both funds stress that they are competitive and point to the need to get value for money. That intrinsically suggests that the process is driven by cost savings and not communities.

Other Members have mentioned the process of how the two funds have been created and that their formation has not been transparent. The Welsh Government do not appear to have had any meaningful engagement. This lack of transparency makes it appear, at the very least, as if that information has been given strategically to Conservative Members of Parliament. Both funds state that the only role of the Welsh Government in the decision-making process is to consult as appropriate. Ultimately, this is the centralisation of a decision-making process and it omits the devolved Administration.

I conclude with two questions that I would like the Minister to address today. Given the importance of maintaining strong UK relationships—as a Scottish MP, I take an interest from that perspective, too—will the Secretary of State and the Minister commit to a meaningful relationship with the Welsh Government in the formation and administration of the UK shared prosperity fund? Was it discussed at last week’s four nations meeting? When will Parliament receive a full read-out of that meeting from the Government?

Secondly, can we get a clear outcome on how the Government plan to meet their pledge that Wales will not lose out on funding that it previously received from the EU, including whether certain areas and priorities will lose funding?

Photo of Gerald Jones Gerald Jones Shadow Minister (Wales) 3:35 pm, 8th June 2021

It is a pleasure to serve under your chairmanship for the first time, Ms Rees. I congratulate my hon. Friend Ruth Jones on securing today’s important and timely debate.

We have heard about the additional funding to Wales, and let us be in no doubt: there is nobody who will not welcome funding to Wales, wherever it comes from. However, the Welsh budget is still lower per person in real terms than it was in 2010, so that additional funding is all the more important. The important issue today, as we have heard from a number of Members, is the lack of clarity, which is causing concern. There are questions about why some areas have been identified for funding and others have seemingly been overlooked, as well as over the incredibly short timescale for submitting bids.

Then there is the top-down, Whitehall-led approach that the Government have insisted on using for both funds. Welsh local authorities, like my own in Merthyr Tydfil, and Caerphilly County Borough which covers the upper Rhymney valley part of my constituency, have had 20 years’ experience of working together through the Welsh Local Government Association and alongside the Welsh Government to deliver successful regeneration projects. It is deeply concerning that instead of a strategic, joined-up approach to investment in tackling the urgent issues affecting our communities, we now see a centralised Whitehall-led approach being administered by Departments with no real understanding of the needs of Welsh communities. They have limited experience of working with communities in Wales and little understanding of the priorities of those communities, and there is a complete bypassing of devolution, as we have heard numerous times this afternoon. That is not the partnership approach that we could have all supported; it is a real step backwards.

I want to give the Minister one example. Some years ago, prior to entering this place, I was a local councillor and was heavily involved in a regeneration strategy in my own local community in New Tredegar. A hugely successful regeneration project had £6 million of EU funding, but that was only a catalyst and we also had funding through the Welsh Government, the private sector, the lottery and other charitable partners—and not least the local community. Fifteen years later, those projects are still going from strength to strength. I illustrate that example because of the nature of the partnership between a number of agencies, not least the Welsh Government.

During this afternoon’s debate, my hon. Friend the Member for Newport West talked about the vital need for transparency, fairness and balance. She talked about not doing “to” communities but doing “with” communities, and I think that is a hugely crucial point. Stephen Crabb talked about the need for greater involvement of local authorities, because it is local authorities, after all, who know their communities best.

My hon. Friend Chris Elmore talked about the need for funding across all of Wales, as well as the question raised by various Members on the future rounds of funding and the role of MPs in the process. I declare an interest in that, because I am in the same situation as my hon. Friend as we cover a number of areas. There are important questions within that.

Alun Cairns said that some parts of the House seemed to welcome EU funding but not UK Government funding. I do not think anybody is suggesting that in the slightest. The important point is that all funding needs to be co-ordinated better with all partners, not least the Welsh Government and local authorities, as I have said.

My hon. Friend Wayne David talked about the poorest communities in some of our constituencies, my own included. The Caerphilly borough, as he mentioned, covers two and a half constituencies, and contains some of the most deprived communities in Wales, if not in Europe. Some of those communities have been on the Welsh index of multiple deprivation over a number of years, so for them to be excluded from the community renewal fund’s priority list is just mind-boggling. My hon. Friend also cited examples of other areas across the country that are not deprived, or do not appear to be. There are real questions about the criteria used for this fund, and as we move forward with the shared prosperity fund, those questions will become even more important.

The hon. Members for Ynys Môn (Virginia Crosbie), for Aberconwy (Robin Millar), and for Clwyd South (Simon Baynes) talked about the abundance of local projects in their areas. Those have been worked up, and I think we all share that experience right across the House.

My hon. Friend Stephen Kinnock talked about the all-party parliamentary group on the UK shared prosperity fund, and the disappointment that there is no new money and that the funding is not diverted to those communities in the greatest need. That issue of tackling need and deprivation in communities is something that has come up throughout today’s debate, as well as in the Welsh Affairs Committee recently and in a number of other conversations, so it really does need to be addressed.

Dr Wallis talked about freeports and projects that we would like to see go forward. However, I gently ask him to compare the level of money provided in England—the £25 million or thereabouts—with the £8 million that is offered for the same projects in Wales, and then question why there are barriers to those projects going forward in Wales.

Craig Williams talked about an issue that a number of Members raised, and which the Minister will hopefully address in his summing up: clarity about the dates of future rounds. He asked us to think about trying something different. We are all up for trying something different, but it does need to be inclusive of all partners, so I ask him to make that request of his own side to ensure that all partners, including the Welsh Government, are included in the process.

My hon. Friend the Member for Aberavon also talked about the need to target deprivation and about the lack of clarity that emerged in the recent session of the Welsh Affairs Committee. Wendy Chamberlain talked about the focus on outcomes and about the hugely challenging timescale and deadline for these funds. I hope I have not left anybody out.

I want to ask the Minister a number of specific questions, some of which have been addressed during the debate. Areas such as those covered by Caerphilly and Bridgend County Borough Councils have been excluded from the priority lists for the community renewal fund. As I mentioned, and as we have heard during the debate, those areas contain a number of the poorest and most isolated communities in Wales, and the fact that they have not been included is mind-boggling.

I and many other colleagues have called for clarity about the shared prosperity fund for a number of years, and we are told that it will possibly be launched next year. Will the criteria set out for the community renewal fund, which has been badged as a precursor to the SPF, be binding on the roll-out of the SPF, or will there be greater flexibility? Will the Minister commit to having another look at the deprivation issues, and at deprivation being a factor in those criteria? That is something that has been puzzling a lot of us.

MPs such as my hon. Friend the Member for Ogmore, who talked about straddling two county boroughs, are in an impossible situation. Surely it would make more sense for funding to be allocated on a local authority basis, rather than a constituency basis, and for those local authorities to devise projects and take them forward. Can bids be submitted by two local authorities in two separate rounds with the MP’s support, or is it the case that once a bid has been approved—possibly in the first round—that is it for that constituency? If we could get that clarity soon, before the first round, that would be helpful.

Finally, what measures will the Minister take to ensure that we can move forward in a spirit of collaboration involving all partners? As I said at the start, any investment is welcome, but it should be done in partnership with regional and local government, and the Welsh Government, who all have significant experience in these areas. Speaking as somebody who is very much pro-Union, we achieve much more when we all work together in partnership for the good of all.

Photo of Luke Hall Luke Hall Minister of State (Housing, Communities and Local Government) 3:45 pm, 8th June 2021

It is a pleasure to serve under your chairmanship, Ms Rees, for the first time I believe. I thank Ruth Jones for securing this hugely important and timely debate. It has been a constructive and informed debate about the issues that we face in delivering these funds. The one thing that has definitely united every contribution today is that everybody in the Chamber wants to secure the best possible future for their constituencies and their communities. Despite differences of opinion, we all agree about the importance of delivering for Wales.

As a Government, we are absolutely committed to unlocking economic prosperity across all regions of the United Kingdom. That is why we believe in levelling up as a central part of our economic agenda. As part of that, we want to address long-standing economic inequalities and deliver opportunity for people, regardless of where they are born or grow up. We want everyone to have the same access to life chances.

A number of both thematic and technical questions have been raised in the debate, and I will try my best to answer as many of them as possible. I want to touch on a large number of them. For the first time in years—decades, maybe—we can provide direct financial support to regenerate towns, high streets and communities right across the country through the United Kingdom Internal Market Act. I think people want to see that type of investment in cultural and heritage assets and high street regeneration, which are so critical to levelling up. Those powers are in addition to the existing powers of the devolved Administrations, and we want to work very closely with them to make sure that they are used to the best effect. We are very conscious that effective relationships in the UK Government—between my Department and Ministers in MHCLG and other Departments—will be critical to making sure that we level up in the way that we intend. That has been a big theme of this debate.

I do not agree with the assertions that we have not engaged with the Welsh Government or local authorities during the course of the development of the funds; we have been engaging with the devolved Administrations and local authorities since 2016, when we started holding engagement events to look at the design of the successor to the EU structural funds. We have held a number of those events right around the United Kingdom, with more than 500 stakeholders attending, including a number of them in Wales.

We held four events in Cardiff and one in St Asaph in January 2019, which Welsh Government officials attended. A key theme that came through in those sessions, including in points made by the Welsh officials, was the need to reduce the bureaucracy of EU funding; another was to make sure that we have the opportunity for collaborative projects across boundaries in Wales. The sessions in Cardiff looked at similar themes, including how to administer the UK SPF and the investment priorities for Cardiff. We held those events with Welsh external experts from a number of different sectors: rural development, business, higher education, the voluntary sector, the community sector and, of course, local authorities.

We also looked at the findings of the Welsh Government’s consultation on replacing EU structural funds. We were very supportive of their recommendation for local authorities in Wales to have a greater role than was available under the delivery of EU structural funds. That is at the heart of the approach we are trying to take here. It is not just about the involvement of the Welsh Government—that is hugely important—but about local authorities, communities and others. That is a key part of this work. We think local authorities can come up with creative local solutions to local issues. That is exactly what we are trying to achieve with this fund.

Hon. Members were right to highlight the fact that we need a constructive relationship with the Welsh Government moving forward. We absolutely want that, which is why we are setting up an inter-ministerial group with the Welsh Government, to have a regular forum to discuss these matters and make sure that there is open dialogue about the importance of these funds. We are also engaging with the Welsh Local Government Association, which I am meeting next week.

Wayne David asked, importantly, whether we will prove that we will engage by visiting constituencies. I would be absolutely delighted to cross the bridge, which is in my constituency, and meet him to discuss that further. The same offer, of course, goes to those on the Opposition Front Bench—I am always very happy to discuss these matters on a collaborative basis.

A number of questions about the levelling-up fund were raised in the course of the debate. It is a £4.8 billion fund that is a hugely important opportunity for our whole country to invest in infrastructure that matters. Those are exactly the things we have heard about during the debate. At least £800 million of the levelling-up fund will be invested in Scotland, Wales and Northern Ireland over 2021-22 through to 2024-25.

I would reinforce the points we heard about the first round of funding, in which at least 5% of that allocation went to Wales. That means Wales will receive more under this design than if the money were Barnettised, because that money is a floor, not a ceiling. That point was well made by my hon. Friend Craig Williams. This is categorically a better deal for Wales, offering a larger share of funding than would have been delivered otherwise. That is underpinned by the certainty of Wales being no worse off than under this approach.

There are other advantages, as this allows us to maximise the strategic benefits of the UK Government. We have seen how that has worked effectively over the past year or so in delivering covid support. As we heard today, we have also allowed, under the design of this funding, cross-border bids to come in. We heard about some exciting opportunities for cross-border bids. The levelling-up fund and the community renewal fund have been specifically designed to allow cross-border bids, which will be another tool to bind our Union even closer.

This process also allows more direct and greater local authority and community involvement. Hon. Members rightly talked about the index we published, which categorises different parts of Wales, and 17 of the 22 local authorities in Wales are priority places for the levelling-up fund. That will help all those local authorities in the bidding process.

I will try to answer a number of the technical questions that were asked. There was a recurring question about deadlines put in place for the first round of levelling-up funding. We have tried to put in place a system that allows local authorities to get moving on projects that they want to deliver in a timeframe. We heard from a number of Members about the need to demonstrate real delivery in the years ahead. That is what we are trying to achieve. We do not want to hold back local authorities that have projects that are ready.

From the engagement we have had with local authorities in Wales, it is appears that they are well prepared for the process: 13 of the 22 local authorities in Wales have told us that they are submitting bids to the levelling-up fund by the deadline later this month. Every single local authority in Wales has opened calls for projects for the community renewal fund. That is a higher percentage for both funds than any other nation in the UK. Local authorities in Wales are well prepared to get their bids in.

I would highlight the importance of the £125,000 capacity funding that we are providing to councils. That helps them to build a new relationship with the UK Government and to start gearing up to deliver the funding. We are excited about the opportunities that that brings. There were also questions about dates around funding, and we will be setting out details later this year. We do not have a specific date that I can give today.

Another question was about how MPs support bids in the usual way. It is important that MPs write to their local authorities, making clear which is their preferred supported bid under the levelling-up fund. If MPs want to support other bids that do not count as part of that weighting process, they can do so by writing to me or to the Secretary of State, or by supporting a bid through their local authorities, making clear which is their approved bid.

The question was asked whether once a bid is approved, that is it. It is a case of one successful bid per constituency in this Parliament. If that bid is successful and a project is being delivered in a constituency, it will not be eligible for a later round of funding. There was a technical question from my right hon. Friend Alun Cairns about feedback on the bids that do not pass the process. Places will receive feedback. We want to ensure that, if people do not pass the first stage, they are in a good situation to submit a second bid.

There was a question about the role of the Wales Office. On the funds we have already launched—the levelling-up fund and the CRF—where appropriate, we will seek advice from the territorial offices and the devolved Administrations at the shortlisting stage. We had questions about the IMD and why deprivation is not included. It is not included because it is not a catch-all that reflects the outcomes from the funds that we are trying to deliver, but I have heard that representation loud and clear. We heard a number of points about the UK community renewal fund and the need to improve on the delivery of EU structural funds. We absolutely take that point; a large number of Welsh local authorities are identified as priority places.

We heard from Stephen Kinnock about the importance of focusing on delivery. There are a number of lessons that we want to learn from the UK CRF, informing delivery of the UK SPF. I am afraid that I do not have time to go into them now, but I am happy to speak in more detail another time if the hon. Gentleman wishes me to do so. We are absolutely conscious of the need to make sure that this is positive investment delivered into Wales. We think that there is a big opportunity for the UK SPF to do that.

I have two last quick points. The first is on the MP’s role in delivering the funding, which was raised by my hon. Friend Dr Wallis. We think MPs have an important role to play in bringing together local stakeholder opinion, in helping to make the decision and in helping stakeholders to submit bids and work with Government.

There are so many more questions that we could have answered, and I am happy to meet any colleague here today who wants to talk about the matter in more detail. We believe that these are important funds, critical to the levelling-up agenda, that we are investing in exciting opportunities across Wales. I look forward to working with colleagues in delivering them.

Photo of Ruth Jones Ruth Jones Shadow Minister (Environment, Food and Rural Affairs) 3:56 pm, 8th June 2021

I thank all those who have taken part in the debate. It was relatively harmonious, because—let’s be honest—we are all here today to fight for the best for our communities. Let me be clear that no one here is dismissing the moneys on offer in these funding streams, and we are grateful, but we need assurances from the Minister that Wales will receive its fair share of replacement moneys now we have left the EU.

Speakers today, including my hon. Friends the Members for Ogmore (Chris Elmore), for Caerphilly (Wayne David) and for Cynon Valley (Beth Winter), and the shadow Minister, have highlighted the confusion that still exists around the bidding process, and around the number of rounds and the criteria that successful bids will be judged by. We need clarity, and we need it now. I am grateful for some of the Minister’s answers, but I urge him to go further and make the process clearer for us all—as quickly as possible please.

It has been good to be able to discuss the new funding streams in a relatively collegiate manner. As my hon. Friend Stephen Kinnock said, outcomes and results, not party-politics, are what we need here. It is not about where the money comes from; it is about making sure that the people of Wales get what they deserve. The funds are much needed, because after 11 years of Tory austerity, Wales has been hit hard. It is time that those wrongs were righted—and quickly. As Wendy Chamberlain said, last year Wales received £375 million from the EU, whereas this year there is just £220 million for the whole UK. We are going to be missing out on funding here.

The Minister spoke about the Barnett formula. We were not talking about Barnett, however, because the money was not Barnettised, and we do not want it Barnettised now either. We just want Wales to have the fair share that it deserves. The overarching concern remains the same: why does the Minister not want to empower the democratically elected representatives of the people of Wales to direct what is spent, and where?

In drawing the debate to a close, I thank you, Ms Rees, for your excellent chairmanship. I also thank those who have taken part, and the Minister for his response and his time. I am sure that this will not be the last debate on the vital topic of funding for Welsh communities, and that there will be many more questions, and hopefully clear, concise answers, in the weeks and months to come.

Question put and agreed to.

Resolved,

That this House
has considered the Community Renewal Fund and Levelling Up Fund in Wales.

Sitting suspended.