Any replacement for EU funds which currently come to Wales should be managed by the Welsh Government, according to the National Assembly’s Finance Committee.
Wales currently benefits from around £680 million through Structural Funding, Common Agricultural Policy, Horizon 2020 and other funding pots from Brussels.
Structural Funding is used to invest in Europe’s most deprived areas including west Wales and the Welsh valleys. The Common Agricultural Policy, or CAP, has had a considerable impact on individual farms, particularly given the tight financial margins involved in the agricultural sector.
The UK Government has outlined a ‘UK Shared Prosperity Fund’ to replace structural funding, but the Committee is concerned there is very little detail on how the replacement would work.
The Committee’s report highlights how allocations from the UK Shared Prosperity Fund should be based on need across the four nations. Wales has areas with some of the lowest Gross Domestic Product (GDP) of all the European regions and the Committee believes it is essential that the same level of funding is secured for Wales.
The evidence presents a strong case for Wales not to be a “penny worse off” as a result of Brexit, and for the Welsh Government to manage and administer Wales’ share of the Fund to deliver Wales’ priorities.
The Committee sees an opportunity to shape a strategic approach for Wales that is free from the constraints of the EU.
With the majority of the important decisions relating to post-Brexit funding for Wales lying in the hands of the UK Government, the Committee is disappointed with the lack of engagement received to-date from ministers in London on this matter of significant importance.
“Brexit remains the biggest issue facing us today, and will impact hugely on Wales,” said Llyr Gruffydd AM, temporary Chair of the Finance Committee.
“We believe our findings form a strong ‘Welsh case’ for how funding should be shared after we leave the EU, and that Wales should not be a penny worse off as a result.
“Both the Welsh and UK Governments need to work together to ensure the best deal is secured for Wales, but the management and administration of Wales’ share lies in Wales.”
Finance Committee member David Rees AM is also the Chair of the Assembly’s External Affairs and Additional Legislation Committee, which has conducted a series of inquiries looking at the impact of Brexit on Wales:
“The Welsh Government has built up expertise and experience over the past 20 years of managing EU funds directly. Wales already has partnerships established and the necessary structures in place to deliver successful programmes, and this approach must continue to ensure a successful Brexit for Wales.”
The Committee makes 11 recommendations in its report, including:
the Welsh Government negotiates with the UK Government to initially secure the same amount of funding to Wales through the UK Shared Prosperity Fund as it currently receives through Structural Funds, plus inflation. This should be added into the Welsh Government’s Block Grant, and remain in place;
the Welsh Government negotiates with the UK Government to ensure the Welsh Government is responsible for the administration and management of the UK Shared Prosperity Fund in Wales; and,
the Welsh Government works with the UK Government and the other devolved administrations to ensure the UK-wide framework for agricultural support respects the devolution settlement and gives the maximum possible flexibility to the Welsh Government to enable it to make decisions that support the specific needs of the Welsh land management sector.
The report will now be considered by the Welsh Government.
Read the full report:
Preparations for replacing EU Funding for Wales (PDF, 2 MB)