The boot is on the other foot for once, with Scotland claiming the UK Government has treated Wales better

Martin Shipton

For what may be the first time ever, the Scottish Government has complained that it is being discriminated against after Westminster gave it what appears to be a worse regional aid deal than Wales.

Mostly the complaints have come the other way, with the Welsh Government repeatedly pointing to ways in which the devolution settlement has benefitted Scotland rather than Wales, with Scotland having greater powers and not being penalised in terms of rail funding, for example.

But a major difference in the way money from the UK Government’s Local Growth Fund has angered the Scottish Government.

The National, a pro-independence paper in Scotland, reported: “Labour in Wales will decide how a £547m growth fund is to be distributed, while the UK Government will decide how Scotland’s £140m allocation is to be spent, in what is being branded ‘blatant political bias’.

Scottish Secretary Douglas Alexander has announced that the UK Government is to invest £140m in five Scottish regions in a bid to boost local economies, but later confirmed that the Welsh Labour Government will control Local Growth Fund allocation within their country, ‘in contrast’ to the SNP in Scotland.

Glasgow will receive £60.9m, Edinburgh £37.8m, the Tay Cities region £19.5m, Ayrshire £11.8m, and Forth Valley £9.8m.

Alexander told BBC Radio Scotland: “How Wales chooses to allocate that funding from the UK Government, rightly and reasonably, is a matter for the Welsh to decide. In contrast, in Scotland, we are taking a different view.”

The SNP’s depute leader Keith Brown described the management of the Scottish Local Growth Fund as “a direct undermining of devolution”.

He said: “Douglas Alexander has said the quiet bit out loud – and confirms decisions by the UK Government at Westminster are done with a blatant political bias.

“This morning’s announcement marks the clearest undermining of devolution by this Labour Government to date.

“It’s not for Douglas Alexander – or any UK Labour minister – to dictate when devolution applies. If the UK Government wants the Welsh Government to distribute these funds in Scotland, then the SNP Government in Scotland must distribute any funding in Scotland.

“These latest moves by the UK Labour Government show just how broken the devolution settlement is. It’s why Scotland needs the full powers of independence for a fresh start and to make decisions about Scotland, in Scotland.”

Written statement 

We asked the Welsh Government to comment on the disparity and were directed to a written statement issued by First Minister Eluned Morgan and Economy Minister Rebecca Evans in October 2025, which said: “A new fund of more than half a billion pounds will launch in April 2026 to create jobs and grow productivity, bringing benefit to every part of Wales.

“The Local Growth Fund for Wales replaces money that used to come from the European Union (EU). Decisions about how the money will be spent will return to the Welsh Government, which honours the UK Government’s manifesto commitment to restore decision-making on money that previously came from the EU.

“The Local Growth Fund is for a three-year period and will deliver against the Welsh Government’s Economic Mission and the UK Government’s agenda for growth. The Welsh and UK Governments have agreed a framework which will set priorities and processes for allocating the funds, with an Investment Plan to be developed and led by the Welsh Government.”

“The new funding is part of a joined-up approach to regional economic development in Wales, which can work alongside other regionally targeted investments to support jobs and growth, including City and Growth Deals and Investment Zones. The aim is to ensure investments complement each other and create efficiencies to support productivity growth and tackle economic inequalities across Wales.

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

But reaction to the new fund has not been grievance-free in Wales either.

‘Top-slicing’

Plaid Cymru has condemned the “top-slicing” of £86m from Wales’ allocation for a Wales’s regional funding allocation for a Whitehall-designed programme known as Pride in Place.. It will have no Welsh Government involvement.

During questioning at the House of Commons Welsh Affairs Committee, Plaid MP Llinos Medi MP drew attention to an £86 million shortfall between the £633m Wales was initially told to expect over the spending period and the £547m it will actually receive.

Pressed by Ms Medi on the reason for the reduced allocation, Rebecca Evans told MPs: “I understand that the decision was taken that some of the funding would be channelled through the Pride in Place fund. Now, that’s a UK Government fund – it’s not something that the Welsh Government are involved with. We haven’t been involved with the design of that, and we don’t have a role in the delivery of that either. Medi MP said:

“This is Welsh regional funding being top-sliced into a Whitehall-controlled scheme behind closed doors. Money that was promised for communities in Wales has been quietly carved up in London, with no guarantee it will be spent where it is needed.

“The UK Government cannot claim to respect devolution while diverting funds into programmes that Wales’s government had no role in designing. The failure of that design is clear: only one town in my constituency of Ynys Môn could even qualify for Pride in Place funding.

“This situation raises serious questions about Labour’s respect for devolution, but more fundamentally it is a question of trust, fairness, and how future settlements for Wales will be protected.”

The Welsh Government did not wish to comment further.