Joint call for devolution of Shared Prosperity Fund to Wales

The Welsh Local Government Association and independent think tank the Bevan Foundation will today [2^nd October] publish a report outlining the necessary arrangements to ensure that regional economic development in Wales is not disadvantaged by Brexit.

The report details the ‘red lines’ for negotiating future regional economic policy in Wales after Brexit, to ensure that Wales is no worse off as a result of the UK’s withdrawal from the European Union. It proposes that a future funding arrangement must not simply be ‘Barnettised’, as Wales would lose out on access to tens of millions of pounds every year.

Due to the UK’s EU membership and low regional GVA rates, Wales has received hundreds of millions of pounds in Structural Funds, intended to encourage economic growth and improve people’s lives. To replace this mechanism, the UK Government has proposed a ‘Shared Prosperity Fund’, indicating that this would be designed and administered at the UK-level.

The report makes a number of recommendations for post-Brexit regional policy, based on a forum attended by academics, policy makers and service delivery organisations held in June 2017. It calls for:

• A funding arrangement which leaves Wales no worse-off after Brexit in relation to the Structural Fund allowance.
• Preferably, devolution of Wales’ share of the Shared Prosperity Fund, or the involvement of devolved administrations and the Local Government Associations in designing the new fund.
• The Welsh Government to lead on designing a regional policy for Wales, in collaboration with local government and other key partners. It should build on the work of the four Regional Partnerships which are already developing place-based plans for their areas.
• Relative need should be based on more than regional GVA levels; it must consider levels of poverty, income, skills and economic inactivity.
• Post-Brexit regional policy must aim to achieve inclusive growth, and address intra- and inter-region economic and social inequality.

Bevan Foundation director Dr Victoria Winckler said:

“It’s been six months since the triggering of Article 50, so the need to prepare for the best possible outcome from the Brexit process is ever more urgent. To date, there has been relatively little discussion about how public policy should respond in relation to the local and regional impact of Brexit in Wales.

“The recommendations in this paper set out what would be acceptable from a post-Brexit regional policy, including what would follow from the significant amounts of Structural Funds that Wales has received. First and foremost, Wales should not be any worse-off as a result of Brexit, which is why the replacement to this – currently proposed to be the Shared Prosperity Fund – cannot simply be ‘Barnettised’. We’re calling for a funding settlement which reflects Wales’ higher levels of need, and that is devolved to Wales.”

WLGA spokesperson for Economic Development, Europe and Energy, Councillor Rob Stewart, said:  

“This report is an important contribution to the Brexit debate. The outcome of these seismic constitutional discussions will have repercussions for the nations of the UK for

generations to come, and it is essential for local government that Wales has the flexibility to develop a distinctive approach that meets the needs of the people of Wales and its communities. WLGA will look forward to continue to work with both the Welsh and UK governments to make sure that the needs of Welsh local government are clearly heard in these important discussions.”

To download the report, please click here.