UK Government pulls plug on aid programme for Wales

Martin Shipton

Regional aid projects worth £80m affecting four locations in Wales have been suspended by the UK Labour government pending a review of how the scheme will operate.

In October 2023 the previous Tory government announced that Barry, Cwmbran, Merthyr Tydfil and Wrexham would each receive £20m following “long-term plan” submissions they had made to the levelling-up budget.

But this week local groups managing the schemes were told that Alex Norris, the Minister for Local Growth, had decided to suspend the long-term plan submissions for all 55 towns and cities awarded funding across the UK.

Local groups expect officials from the Ministry of Housing, Communities, and Local Government – headed by Deputy Prime Minister Angels Rayner – to provide further details and revised timelines in due course.

We understand there is no indication yet that the funding is likely to be withdrawn, and that more updates are likely around the time of the Autumn Spending Review, probably in October or November.

Uncertainty

However, the decision to suspend the programme has created uncertainty, with those involved concerned about the projects’ future.

It is understood that the Chair of the Partnership Board managing the project in Barry has met the new Vale of Glamorgan Labour MP Kanishka Narayan, council leader Lis Burnett and Senedd Member Jane Hutt. They are now essentially lobbying their own party for the grant money or – as a local political source put it – more probably “some” money for Barry.

The source said: “I’m very disappointed in the Labour Party over this. Uncertainty does not help anyone. When a government withdraws a promise for a review, you just know they will come back with a watered-down version of it.”

When the four Welsh locations were awarded the cash in October 2023,the £80m was said by then Prime Minister Rishi Sunak to be part of £1.1bn levelling up investment being provided to 55 towns across the UK. Merthyr Tydfil, Cwmbran, Wrexham and Barry were getting the money as part of a long-term investment plan for towns that have been overlooked and taken for granted.

The money would be provided directly by the UK Government to the relevant local authority. Westminster said it would work with local partners including the Welsh Government to make sure the funding was used to best effect.

Endowment-style fund

Under what was described as a new approach, local people would be put in charge, and given the tools to change their town’s long-term future. They would receive a 10-year endowment-style fund to be spent on local people’s priorities, like regenerating local high streets and town centres or securing public safety. In addition a “town board” would be set up to bring together community leaders, employers and local authorities to deliver the long-term plan for their town and put it to local people for consultation.

At the time, Mr Sunak said: “Towns are the place most of us call home and where most of us go to work. But politicians have always taken towns for granted and focussed on cities.

“The result is the half-empty high streets, run-down shopping centres and anti-social behaviour that undermine many towns’ prosperity and hold back people’s opportunity – and without a new approach, these problems will only get worse.

“That changes today. Our long-term plan for towns puts funding in the hands of local people themselves to invest in line with their priorities, over the long-term. That is how we level up.”

Significant investment

The then Welsh Secretary David TC Davies said: “Merthyr Tydfil, Cwmbran, Wrexham and Barry are all fantastic places and will hugely benefit from this significant investment in their future. We are proud to be supporting people to take control of their local areas. Levelling up is at the centre of the UK Government’s ambitions and communities across Wales will be transformed over the coming years with the investment we are making in them.”

The long-term plan for towns would require town boards to develop their own long-term plan for their town, with funding over 10 years and aligned to the issues that research shows people want the most, such as:

* Improving transport and connections to make travel easier for residents and increase visitor numbers in centres to boost opportunities for small businesses and create jobs.

* Tackling crime and anti social behaviour to keep residents safe and encourage visitors through better security measures and hotspot policing

* Enhancing town centres to make high streets more attractive and accessible, including repurposing empty shops for new housing, creating more green spaces, cleaning up streets or running market days

Towns were allocated funding according to the Levelling Up Needs Index, which took into account metrics covering skills, pay, productivity and health, as well as the Index of Multiple Deprivation, aimed at ensuring funding went directly to the towns which would benefit most.

The decision to suspend the programme has thrown the future of the plans into doubt.

Harm

Plaid Cymru Westminster leader Liz Saville Roberts said: “The Tories’ so called ‘levelling up’ funds were never accompanied by a real, effective strategy to properly invest in the futures of our communities across Wales – all while undermining democracy by shutting the Senedd out of funding decisions in Wales.

“However, potential changes to already allocated long-term funding, without clarity in terms of financial impact, or plans for replacement funding, will harm local areas. Such uncertainty over future funding only damages long-term budgetary planning on the local and regional level.

“Plaid Cymru calls on the Labour UK and Welsh Governments to set out plans to ensure communities in towns across Wales will not have to face unexpected shortfalls as a result of UK Government political whims and changing interests.

“This is exactly why it’s imperative that decisions affecting Wales are made in Wales, according to the needs of the people of Wales. Now is the time for Labour to show their promised ‘change’ by putting the Welsh Government back in charge and devolving post-Brexit regional funds.”