How to replace European Union funds

With campaigning suspended because of the Manchester terror attack, I have taken the opportunity to reflect on one of the big Welsh questions in the general election campaign: what will replace European Union funds for economically deprived communities?

Much of the debate has focused on whether there will be as much money being signed off from Westminster, as has been the case from Brussels in recent years.

Wales has had £4bn in structural funding since 2000.

But there has been little detail on arguably the most important point regarding how the parties would spend any replacement money after Brexit.

The Conservatives have set out plans to create a Shared Prosperity Fund to reduce inequalities across the UK.

Expensive

There has been no shortage of criticism about the existing system - "expensive to administer and poorly targeted" as well as wasteful - but far less detail on how the new fund would work, other than being "cheap to administer, low in bureaucracy and targeted".

What we do know is that it will be based on the party's so called "modern industrial strategy".

The manifesto says that strategy is not about "picking winners, propping up failing industries, or bringing back old companies from the dead."

It goes on to say the strategy is about identifying the places that have "the potential to contribute towards economic growth and become homes to millions of new jobs".

The focus is all about industries that have a strategic value. Steel-making is mentioned although it appears to be more about tech and digital sectors, which are in short supply in areas like the south Wales valleys.

Penny

The funding would be directed to the private sector; the question is how that money would find its way to those economically-deprived communities if the business base is not already there?

The Labour manifesto has no details on any priorities for replacement funding, other than to say that Wales would not lose a penny after Brexit.

There was a bit more from the first minister, in an interview I did with him for Wales Today last week, when he said there should be no immediate change to the status quo as he believed it had served Wales well.

He added that in time the UK Government and the devolved administrations would have to come together to work out a way forward.

There is a turf war going on. The current EU structural funding system is administered by the Welsh Government via the Welsh European Funding Office, and Carwyn Jones clearly wants to maintain control of a pot of money that has become a central part of economic development policy.

'Devolve and forget'

With Theresa May's wish to move away from a "devolve and forget" policy, it does not look like that will happen if the Conservatives win the election.

The Tories say they will consult the devolved administrations but ministers in Westminster would be in the driving seat.

Plaid Cymru has also stressed it will not accept a penny less of the EU funds after Brexit with a view to "investing in our local communities to give the people of Wales every chance to succeed".

Of course, the backdrop to all of this is the EU referendum, and the striking fact that those communities which received most European funds had some of the highest number of Leave voters.

In other words, it would appear that the way the money was spent was clearly not valued by many of those who were supposed to have benefited the most.

It would also appear in the campaign so far that criticising the current system is far easier than coming up with detailed ways of spending new money to help some of our poorest communities.

Related Topics