Welsh infrastructure secretary Ken Skates has acknowledged that the South Wales Metro programme of public transport improvements could be scaled down as a result of the EU referendum result.
EU funding would have covered 20% of Metro’s £734m capital cost. Before the referendum, Brexit campaigners promised that EU grants would be replaced by equivalent grants from London.
The proposed South Wales Metro network
Mr Skates told the Welsh Assembly: ‘If that does not happen, then this could mean unfortunately a reining in of the plans for the Metro which may include, for example, fewer services available or fewer stations and park-and-ride facilities at planned stations.’
The UK Government has given its strongest hint yet that it will not replace the EU’s £150m for the Metro. Welsh secretary Alun Cairns (a Westminster cabinet member) told the BBC: ‘Just changing one source of income for another is not the answer.’
Wales’ pro-Brexit referendum vote had demonstrated that the projects underpinned by EU aid did not have ‘traction’ with communities, he said.
Asked whether innovative funding for the Metro could be considered by an independent infrastructure commission, Mr Skates said he did not believe that capital borrowing by a commission could compensate for the lost EU funding, ‘not least because there would be implications in terms of ongoing revenue costs for borrowing’.
The Metro is the centrepiece of the £1.2bn Cardiff Capital Region City Deal, to which local authorities are expected to contribute £120m from capital borrowing. Cardiff CC’s cabinet will be updated this week on the City Deal and referendum implications.
Other EU funding potentially at risk includes as much as £100m due to the UK Government from the EU Solidarity Fund following last winter’s floods.
Ministers delayed applying to the fund until just before the deadline and enquiries by Transport Network suggest that the Government has still not provided the European Commission with the information needed to assess the application.
Adding to the uncertainty, the Government has also declined to confirm that any EU funds will be passed on to councils.