Wales: European Structural Funds

Baroness Humphreys Excerpts

Wednesday 5th February 2020 Lords Chamber

[Baroness Humphreys (LD)]

My Lords, it is a pleasure to take part in this important debate and I thank the noble Lord, Lord Wigley, for securing it at such an appropriate time. I also add to the voices who welcomed my noble friend Lord Thomas of Gresford back to his place on these Benches. It is good to have him back. It is also a pleasure to follow the vastly experienced voices of the three noble Lords who have already spoken.

I suppose I can say at the outset that I and the community in which I live have a vested interest in this debate. That is certainly true. Since 2001, Conwy County has qualified for European structural funding and benefited from the investment of £82.8 million over the ensuing years. This has funded 113 projects and resulted in job creation and improvements to the economy and the environment of both the rural and coastal areas of the county.

Throughout the county, capital projects have created new business units, regeneration projects linked to coastal defence work, and conservation, biodiversity and access projects in the rural area. We have also seen projects delivering improvements to the county’s tourism attractions and heritage-based projects, as well as a major events centre that has become a centre of excellence for sport. Conwy County has also initiated an EU-funded project designed to support young people in danger of disengaging with education, a project to support those identified as not in education, employment or training to overcome barriers and engage in skills and employment opportunities, and a project to increase take-up and attainment in STEM subjects among 11 to 19 year-olds in north-west Wales. Over the years, the county has been a partner in wider European projects with other countries: the Ireland Wales programme, the Youth in Action programme, Erasmus and the Leonardo programme.

Lists such as this are impressive: they show that EU funding has supported investment in infrastructure, research and innovation, and skills, and targeted those individuals furthest from the labour market. They are representative of work being carried out in councils throughout the west Wales and the valleys area. They reflect the commitment of the councils involved to improving their local economy, and the foresight of the European Union in targeting funds to help the Welsh economy and labour market recover from decades of industrial decline.

The success of European structural and investment funds in Wales can be measured by the fact that they have helped to more than halve the gap in economic inactivity rates between Wales and the UK since 2001. The investment we have seen through successive EU programmes has created some 51,000 new jobs and 14,000 new businesses in Wales since 2007, while also helping some 92,000 people into employment. EU funds in Wales have repeatedly demonstrated value for money. The Wales Audit Office’s report Managing the Impact of Brexit on EU Structural Funds also recognised that the Welsh European Funding Office is doing well in managing the risks and opportunities in light of the implications of Brexit.

But all this is in the present or the past. This debate encourages us to look to the future and consider the issue of replacing all these funds as the UK leaves the EU, presumably on 31 December this year. This, of course, is where the questions begin. The Commons Library has noted that many considerations are required for the shared prosperity fund, which is to replace EU funding, including priorities, objectives, amounts of money, allocation, method of model, length of planning and who administers the funds, none of which has yet been itemised.

For those of us who live in Wales, the last matter is probably the most important. European funding has been administered in Wales by the Welsh Government under the devolution settlement. One would assume that the status quo will continue, but the situation lacks clarity, with changes in emphasis in statements made by government Ministers. For the Minister for the Northern Powerhouse and Local Growth, the answer was “absolutely yes” to a question about whether the devolution settlement would still apply.

Contrast this with the view of the Prime Minister, who said:

“I think there may be some question about how exactly that money is dispensed or by whom. I would want to make sure that there was a strong Conservative influence on the expenditure.”


If we can have no certainty about the Government’s commitment to the devolution settlement, how much faith can we have in their promise that the fund’s budget must be no less in real terms than the EU and UK funding stream it replaces?

Politicians and those tasked with delivering projects have myriad questions. On their behalf, I would be grateful for the Minister’s guidance on the following points. First, will the shared prosperity fund’s moneys be allocated on a targeted, needs-based approach to regions and nations, or will competitive bidding be used? The Institute for Public Policy Research argues:

“Regional inequality is a persistent challenge for the UK and … a targeted and needs based approach will need to continue to invest into regions and nations to avoid this worsening.”


I hope that the Government will heed this advice.

Secondly, how will the shared prosperity fund work in practice to deliver desired outcomes across Wales? Thirdly, what roles will local and regional bodies play in the fund? Fourthly, how might administrative arrangements be simplified from those of existing EU funds? With 11 months to go before the end of the current schemes, these are all questions that those who work in the sector need clarity on, to enable them to plan ahead and prepare for new schemes. Finally, as has been mentioned, the Government have promised a consultation on the shared prosperity fund. When will this begin?