Half a billion pounds growth fund announced for Wales

The UK Government has announced new funding worth half a billion pounds to "create jobs and grow productivity" across Wales.

The Local Growth Fund replaces money that used to come from the European Union.

Decisions about how the money will be spent will return to Wales, honouring the UK Government’s manifesto commitment to restore decision-making on money that previously came from the EU.

The Welsh and UK Governments say they have agreed a framework which will set priorities and processes for allocating the funds, with a delivery plan developed and led by the Welsh Government.

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Consultation

Local authorities and other partners will have a key role in deciding how the funding is spent.

Later this month, the Welsh Government will consult on the best way to use the funding through a consultation.

The Welsh Government says it is keen to understand how it can best support people into work and help people gain new skills and qualifications to progress into higher paid jobs, so that a larger proportion of the population is employed.

The cash could also be used to help grow Welsh businesses and boost investment in research and innovation, in areas such as health and bio-tech, financial technology, low carbon energy and AI.

It also hoped the funding will address the issues that are holding back growth, such as the need for key sites and premises, renewable and low-carbon energy generation, energy efficiency, and low-carbon transport.

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'Barriers'

First Minister Eluned Morgan said: "Our new Local Growth Fund for Wales is a significant opportunity to support businesses and social enterprises to grow, export and innovate - particularly in high-growth sectors such as AI, cybersecurity and digital transformation.

"By tackling barriers like access to finance and encouraging investment in research and development, we can help build a more competitive and resilient Welsh economy.

"Supporting people into work and helping them progress is vital to reducing economic inactivity. By aligning skills development with the needs of our regional economies, we can ensure people across Wales are well placed for the jobs of the future.

"We’re keen to see a strong focus on green infrastructure, energy efficiency and local regeneration. We will encourage investment in renewable energy, low-carbon transport, and heritage. Tourism will be supported in a way that helps our communities thrive.

"I’m very pleased that, following agreement with the UK Government, decisions on the priorities in this fund will be made here by the Welsh Government."

Secretary of State for Wales Jo Stevens said: "This more than half a billion pound investment from the UK Government is key to driving economic growth in Wales, helping to grow businesses and get more people into good well-paid jobs.

"Decisions about how this money is spent are best made by people in Wales and we are working with the Welsh Government to achieve our shared priority of delivering growth, prosperity and opportunity across the country."

Reduction 

The Welsh Conservatives say the local funding growth model is a reduction in funding compared with the previous post-EU funding model.

Under the Shared Prosperity Fund, the UK Conservative Government allocated £585 million to Wales over three years.

Under the new model, Wales will receive £547 million over three years - £38 million less.

Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, Samuel Kurtz said: "Under Labour, Wales was promised more funding, not tens of millions of pounds less.

"The Welsh Labour Government getting to hold the purse strings does not fill me with hope, as they routinely waste taxpayers’ money on vanity projects like the creation of more politicians or on non-devolved areas like their pointless overseas embassies and Ugandan tree planting.

"This funding should be used to support struggling Welsh businesses who have had to contend with Labour Governments at both ends of the M4 hitting them with higher taxes."