Scheme in Welsh devolution row won’t apply in Northern Ireland

A controversial scheme which will see money spent in Wales while bypassing the Welsh government will not fully apply to Northern Ireland, the UK government has said.

Sir Keir Starmer’s government will decide how cash from the second phase of its scheme for town centre improvements is spent in Wales, while the Northern Ireland Executive will receive “corresponding funding” which it will control.

Eleven Labour Senedd politicians wrote to the prime minister to complain the Pride in Place scheme rolled back devolution by going over Cardiff ministers’ heads.

The UK government directed the BBC to Starmer’s response last week where he said he was a “big believer in devolution”.

Phase one of the UK government scheme allocated cash to communities across the UK to fund town centre improvements.

But Hilary Benn, Northern Ireland Secretary, told Plaid Cymru MP Llinos Medi that for phase two “corresponding funding will be made available in Northern Ireland through the local growth fund, with a total UK government investment of £45.5m” over three years.

“The decision was made in consultation with the Northern Ireland Executive”, he said in a written answer to a parliamentary question from the MP for Ynys Môn.

Medi said that “unlike Wales, Northern Ireland was consulted… while Welsh funding has been top-sliced and redirected to Whitehall”.

“Wales deserves the same respect and transparency,” she added.

In Wales the second phase of Pride in Place will see nine local authorities receive £20m each from the UK government over ten years.

The funding for Pride in Place has come from a pot of cash known as local growth funds, most of which will be handled by the Welsh government and is designed to replace EU economic aid.

Welsh Economy Minister Rebecca Evans appeared to confirm this was the case in the Commons’ Welsh Affairs Committee under questioning from Medi.

Medi asked why it had been announced at the spending review that the fund was worth £633m over the three years, but October’s announcement of what the Welsh government would control put the figure at £547m, suggesting a shortfall of £86m.

While Evans said she was pleased the UK government had given decision-making powers on the growth funds to Wales, she added: “I understand that the decision was taken that some of the funding would be channelled through the Pride in Place fund.”

The scheme uses a law called the UK Internal Market Act (UKIMA) which allows the UK government to provide financial assistance in areas usually controlled by Cardiff without seeking permission from the Welsh government.

It allows the UK government to spend money on town centre improvements – something that is usually the responsibility of ministers in Cardiff.

The Welsh Labour government remains opposed to the legislation, which was first introduced while Boris Johnson was prime minister, and First Minister Eluned Morgan has discussed her concerns with current Prime Minister Sir Keir Starmer.

A strongly worded letter to Starmer released to the media last week said Pride in Place had caused “considerable unhappiness amongst Welsh Labour Senedd members”.

The 11 Labour MSs who signed the letter argued that the whole local growth fund should have been passed to the Welsh government, which managed EU funds before Brexit.

The UK government referred to comments from Starmer last week, where he denied he was rolling back devolution.

He said: “I am a big believer in devolution and I am a big believer in the benefits of devolution when you have a Labour government, a Welsh Labour government here, and a Labour government in Westminster, and we are already making a massive difference in terms of what we can do together.”