Community Renewal Fund and Levelling Up Fund in Wales

(Limited Text - Ministerial Extracts only)

Tuesday 8th June 2021 Westminster Hall

[The Minister for Regional Growth and Local Government (Luke Hall)]

It is a pleasure to serve under your chairmanship, Ms Rees, for the first time I believe. I thank the hon. Member for Newport West (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.

The hon. Member for Caerphilly (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 the Member for Montgomeryshire (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 the Member for Vale of Glamorgan (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 the hon. Member for Aberavon (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 the Member for Bridgend (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.