The UK Government's Shared Prosperity Fund shows a "lack of respect" towards Wales and devolution, the Institute of Welsh Affairs has said.

It warns that the funding package (UKSPF), Westminster's replacement for money previously allocated to Wales by the EU, will take funding out of some of the most deprived Welsh areas and is motivated by a "political desire" to cut out elected Welsh representatives from decision-making.

“This is ultimately a disappointing scheme that will not ‘level up’ Wales," said Harry Thompson, Economic Policy Lead at the Cardiff-based thinktank.

"The promise to Welsh voters of ‘not a penny less’ than EU funding has been broken, and the remaining funding has been partially diverted away from the most deprived areas in Wales.

"Large parts of the UKSPF are designed not on sound economic development principles but are rather based on a political desire to cut the Welsh Government and Senedd out of decision-making, returning the final say to Westminster - be that MPs, the UK Government, or the Secretary of State for Wales.

"This is a deliberate retrenchment of devolution to Wales."

The UKSPF, announced last week, has already been strongly criticised by Welsh politicians, with First Minister Mark Drakeford accusing Westminster of "levelling down" Wales, and Plaid MP Liz Saville Roberts calling the policy "another bitter reminder that Westminster will never work for Wales."

We would be receiving around £375million per year through EU funding grants, the Welsh Government estimates, if the UK had remained a member.

North Wales Pioneer: Liz Saville Roberts MP (Picture: PA Wire)Liz Saville Roberts MP (Picture: PA Wire)

The UKSPF will instead provide Wales with just £585m spread over the next three years - and some of the money will be earmarked for Multiply, a new UK Government adult numeracy programme designed to "support people with no or low-level maths skills get back into work".

Previous EU funding levels will only begin to be matched by Westminster from the end of 2024.

Decisions on spending this money will be in the hands of councils, MPs and local businesses, the UK Government said, bypassing the devolved governments of Wales, Scotland and Northern Ireland.

On the role of the Senedd, Holyrood and Stormont, a UKSPF policy document said only: "Members of the Scottish Parliament, Members of the Senedd and Members of the Northern Ireland Assembly should also be engaged where relevant."

The Institute of Welsh Affairs believes that the plans are a deliberate attempt to wrest control back from Cardiff Bay.

"We are disappointed at the lack of respect given to devolved institutions in Wales," it said in a statement.

"The prospectus very clearly seeks to elevate the role of MPs above that of MSs or even the Welsh Government.

"This is an area that was formerly held at a Wales level but that has been taken back without consent to a Westminster level.

"It deliberately cuts out any formal role for the Welsh Government or MSs, and requires local authorities to work to UK Government priorities and to gain the sign-off of UK Government Ministers for local schemes.

"The prospectus also calls for the Secretary of State for Wales to be involved in plans, but not the Welsh Government.

"One is elected by the people of Wales, and one is not."

Deprived Welsh communities "will now have less funding and require sign-off from Westminster politicians to use it," the thinktank concluded.

Last week Economy Minister Vaughan Gething said that the Welsh Government had "made frequent attempts to engage with UK Ministers" as they developed the Shared Prosperity Fund, but hadn't been given the chance to meaningfully negotiate with Westminster until this month - and only then because the UK Government wished to announce the programme in time for the local government pre-election period.

Concerns about Westminster powergrabs have been growing over recent months and years.

The UK Government's post-Brexit Internal Markets Act, passed in 2020, was designed to "create a new limit on the effect of legislation made in exercise of devolved legislative or executive competence" - in other words, it limits the Senedd's future lawmaking powers.

Legal challenges over the Act have already cost the Welsh Government thousands.

Noting the UK Government's increasing tendency towards introducing laws for Wales in areas that should be the responsibility of the Senedd, Plaid Cymru MS Rhys ab Owen wrote in December: "The process highlights the real precarious nature of the devolution settlement here in Wales."