Agenda item

Dylan Griffiths, Manager, Shared Prosperity Fund North Wales (Manager, Economic Development Service) Cyngor Gwynedd to present the report.

·        To authorise the Corporate Joint Committee’s Economic Well-being Sub-Committee to monitor delivery of the Local Growth Fund’s transition year (2026/27) and guide preparations for the transition of the Fund to the Corporate Joint Committee from 2027/28.

·        To endorse the intention to maintain the approach and governance arrangements of the Shared Prosperity Fund in North Wales - including Cyngor Gwynedd’s role as lead local authority for the Local Growth Fund’s transition year in 2026/27 and the submission of a plan to this end to Welsh Government.   

·        To authorise utilisation of funding provided to the Corporate Joint Committee to prepare for delivery of the Local Growth Fund beyond 2026/27, working collectively with local authorities and partners to co-produce the region’s proposals.   

The report was submitted highlighting that 2025/26 was the final year of the Shared Prosperity Fund (SPF). It was noted that the SPF had provided almost £169 million to support the economic and social development of North Wales since 2022, but from 1 April 2026 the Local Growth Fund (LGF) would replace it. It was explained that the LGF would be funded for a period of three years, with the hope from Welsh Government, that it would continue beyond that.

It was explained that the shift from SPF to LGF included many changes to the purpose and process for the funding, including the UK Government giving LGF funding to the Welsh Government, which, in turn, intended to transfer the funding to the regions in Wales. It was added that there would be an intention to focus more on securing growth.

It was explained that the Welsh Government wished for lead local authorities, namely Cyngor Gwynedd in north Wales, to continue in their role for the short-term. It was elaborated that the Welsh Government intended to allocate most of the funding to the CJC from 2027/28 onwards, and additional money would come to the CJC in 2026/27 in order to plan and prepare.

It was noted that the composition of the money was changing substantially, moving from being mainly revenue money in nature, to mainly capital money. Members were informed that a change had been made to the sum submitted in section 4.12 of the report, following an error by the Welsh Government. It was noted that the report stated a sum of £35.69 million, but the Welsh Government had confirmed that £33.78 million was the correct amount, noting a reduction of around £1.9 million.

It was reported that the Welsh Government made it a requirement to prepare an action plan for the Fund's first year, by working jointly with Cyngor Gwynedd, officers from the local authorities across the region, officers from the CJC and officers from the Welsh Government. It was emphasised that Cyngor Gwynedd's intention was to have a process that was as consistent as possible to the method followed for the SPF. It was highlighted that Cyngor Gwynedd's suggestion was to continue to give decisions to local authorities, ensure that local authorities benefited from the resources available to them, and that any choice relating to the regional work was being made based on the regions’ choices.

It was added that when the action plan would be accepted by the Welsh Government, a new agreement would have to be established between the counties.

Concern was expressed about the Welsh Government's decision to allocate funding through the CJC from 2027/28 onwards. It was noted that this was not a reflection on the CJC; but rather a strong belief in devolution and the belief that sending money to the CJC instead of local authorities took decision-making powers away from local authorities. The Monitoring Officer's opinion was sought on the rights that the Welsh Government had to make financial decisions for the future, considering the Senedd Election in May 2026.

It was explained that as the funding came from the Welsh Government, it was the Government's choice to decide how the money was allocated. It was noted that were there a change in administration following the Senedd Election in May, the funding method could also possibly change, which may not include regional bodies such as the CJC in the process, or it could change the extent to which the CJC was involved in statutory functions relating to economic well-being.

Frustration and disappointment was expressed regarding the financial difficulties that local authorities were already facing. It was asked how an error on the Welsh Government's part in terms of the significant reduction in the LGF indicative allocation for 2026/27 was made, and whether it was possible to defer the decision until after the Senedd Election in May.

The members were informed that there was no obligation to accept the funding, but as a regional body with a legal mandate to ensure the economic well-being which had been offered the resource to achieve its statutory duty, it was likely that the CJC would face implications should it refuse the funding. It was noted that it was a matter for the CJC whether the decision could be deferred or not.

It was highlighted, despite the funding reduction, that the CJC would need to approve the decision sought in order to avoid any potential implications. In addition, it was noted that the CJC had to be mindful of how the current Welsh Government operated, and the CJC's responsibility was to do the best they could with the resources they had.

It was reported that Cyngor Gwynedd had been directly informed by the Welsh Government that the wrong sum in section 4.12 of the report was a simple error, as the Welsh Government had calculated the distribution amongst the Welsh regions on the wrong basis.

Members were reminded that the Welsh Government intended to give £200,000 to the CJC in 2026/27 to press on with this work. It was suggested that the CJC should look for a way to engage with the local authorities individually to co-develop and collaborate.

The members expressed their thanks for the report.