Shared Prosperity Fund: Devolved Administrations

Stephen Kinnock Excerpts

Tuesday 1st March 2022 Westminster Hall

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Belfast South (Claire Hanna) on securing this debate. I declare my membership of the all-party parliamentary group on the shared prosperity fund.

Since we heard about the shared prosperity fund way back in 2017, the whole thing has been shrouded in confusion. The Government have been less than forthcoming with clarity and detail. While we now have some more information about the fund, there is still too much uncertainty.

Then there is the top-down, Whitehall-led approach that the Government have insisted on using. Welsh local authorities such as my own in Merthyr Tydfil and Caerphilly County Borough Council, which covers the Upper Rhymney valley part of my constituency, have 20 years’ experience of working together through the Welsh Local Government Association and alongside the Welsh Government to deliver strategic regeneration projects. It is deeply concerning that, instead of a strategic joined-up approach to investment to tackle the urgent issues affecting our communities, we now seem to see a centralised Whitehall-led approach 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. There is also the complete bypassing of devolution.

[Stephen Kinnock (Aberavon) (Lab)]

My hon. Friend is making an excellent speech. I also declare an interest: I chair the APPG on the shared prosperity fund. The pre-launch guidance to the fund simply says that the devolved Administrations

“will be invited to play a role in the development and delivery of local investment plans.”

Does my hon. Friend agree that that is an incredibly vague statement, which could mean absolutely nothing, and that the fund is also part of a broader project being pursued by the UK Government of dismantling the entire project of devolution?

[Gerald Jones]

I very much agree. We are seeing an opportunity to bypass devolution, which is a very real threat to what has been built up over the last 20 years. This is not the partnership approach we all could have supported; I fear that it is a real step backwards.

I am deeply concerned, as I know others are, that Wales and areas across the UK are going to lose out as a result of the withdrawal of EU funds, despite the promise that we would not lose a penny. The Chancellor’s Budget for next year shows some £400 million across the UK as opposed to the £1.5 billion that was earlier mentioned. For the purposes of comparison, Wales alone used to receive £375 million. Next year, for the whole of the UK the figure will be barely that.

The lack of clarity from the Government on the amount of funding, how it will be used and the involvement of devolved Administrations has been hugely disappointing from the start, and it saddens me that it shows no sign of improvement. Hopefully, the Minister will give us further clarity and address the points that have been raised for so long.

I want to give a short, quick example to the Minister. Some years ago, prior to entering this place, I was a local councillor heavily involved in regeneration in my local community. A hugely significant regeneration project had £6 million of EU funding allocated to it, but that was just a catalyst. That funding also unlocked funding through the Welsh Government, the private sector, the lottery and other charitable partners, and not least the local community, meaning a significant investment of around £26 million all told. Those projects are still going strong almost 20 years later and are going from strength to strength. I use that example as an illustration because of the nature of the partnership between agencies, not least local government and the Welsh Government. We should learn from such examples.

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

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Belfast South (Claire Hanna) on securing this important and timely debate. It was also good to welcome the Minister of State for the Northern Ireland Office, my right hon. Friend the Member for Bournemouth West (Conor Burns), who was listening to all the extremely important points being made as closely as I was.

Given the short time available, I will come directly to the important points made by hon. Members. I am not here to argue the toss with them, but to try to start to set out how we will work together to do all these things. As hon. Members know, the shared prosperity fund will provide £2.6 billion of new funding for local investment by March 2025; it is a significant scheme. It will be provided through a funding formula, rather than a competition, which is important. While there are advantages in funding competitions, because they get people sharpening their pencils, there are a lot of advantages in formula allocations, because people have the same certainty that places used to have through some of the European structural funds.

[Stephen Kinnock]

On the point about funding, the Minister has just mentioned the figure of £2.6 billion. Does he therefore accept that the manifesto commitment has been broken? The manifesto commitment was to match the previous funding, which would mean £1.5 billion per year over a seven-year planning cycle. The comprehensive spending review is only a three-year time horizon, so will the Minister accept that the manifesto pledge has been broken?

[Neil O'Brien]

I will come to quantums later in my speech, but no, we will keep our manifesto promises.

The hon. Member for Belfast South raised really important points, and I hope I can start to set Members’ minds at ease. The hon. Member for Strangford (Jim Shannon), whose health I would have feared for had he not been here today, was right when he said that we are all on this journey together.

I agreed with the hon. Member for Ceredigion (Ben Lake) when he said that we must work with devolved Governments and local people, not over their heads. I also agreed with the sensible speech made by hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), who said that we must use the experience of local partners who know what is needed and how to run these kinds of schemes.

In Scotland, Wales and Northern Ireland we are very clear that we want local partners, at all levels, to be able to shape what is done to this funding and how it is allocated. In Northern Ireland, we have a unique local government landscape in our work on the UKSPF, so we proposed to deliver at a Northern Ireland-wide scale, which will enable us to have an allocation that is felt to be fair by all communities and that will make the most of all the fantastic opportunities that there are across Northern Ireland.

The development of that single Northern Ireland plan will draw on the insight and expertise of local partners, including the Northern Ireland Executive, local authorities, businesses, the community and the voluntary sector, in order to maximise all the local intelligence, insight and knowledge that they have. We have engaged with the Northern Ireland civil service, the Northern Ireland Local Government Association and Solace on UKSPF.

I have also reached out to the Northern Ireland Executive’s Minister for Finance and I plan to discuss the UKSPF further with him on Thursday. I had a very useful meeting with Minister Lochhead from the Scottish Government on Friday, and I am setting up a meeting with Vaughan Gething of the Welsh Government, as well. We are keen to work with all of the devolved Administrations to shape the way this funding is used.