UK Government accused of redirecting millions in Welsh funding to Whitehall scheme
Emily Price
The UK Government has been accused of redirecting £86 million of Wales’ regional funding allocation to a Whitehall-designed programme that the Welsh Government has no control over.
This week, Cabinet Secretary for Economy Energy and Planning, Rebecca Evans, appeared before the Welsh Affairs Committee in London to give evidence.
The session examined inward investment and the industrial transition facing Wales.
It also covered the new Local Growth Funds due to replace the Shared Prosperity Fund from April 2026.
During the meeting, Evans suggested that part of Wales’ expected Local Growth Fund allocation has been top sliced by the UK Government to finance its Pride in Place scheme.
Announced in September, the £5 billion 10-year initiative aims to regenerate disadvantaged neighbourhoods.
During questioning, Plaid Cymru MP Llinos Medi drew attention to an £86 million shortfall between the £633 million Wales was initially told to expect over the spending period and the £547 million confirmed in October.
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.
“So, I think, I will check, but I think the funding we’re talking about here relates to the Pride in Place funding.”
Speaking after the evidence session, Medi 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 disclosure comes amid mounting tensions within Labour, after 11 Welsh Labour MSs accused the UK Government of “rolling back devolution” through the imposition of Pride in Place under the UK Internal Market Act.
In a letter to the Prime Minster, Sir Keir Starmer, MSs fumed that the flagship communities scheme was operating in a “wholly devolved area”.
Signatories of the letter asked the Prime Minister: “Why is the UK Government directly funding Welsh Councils to fix bus shelters, reopen park toilets, and provide bins?
“As well as top-slicing funding from the Local Growth Fund – which we would have expected to have been passed to the Welsh Government as an EU successor fund – Pride in Place is being imposed using powers in the UK Internal Market Act 2020.
“Regeneration is a devolved matter. Yet UKIMA is being used to give the UK Government authority to provide financial assistance without requiring consent from the Senedd or Welsh Ministers.”
It’s understood that the concerns were also raised by First Minister Eluned Morgan when she met with the Prime Minister in Chequers last month.
The Welsh Conservatives say there has been a breakdown in communication between Labour in Westminister and ministers in the Senedd.
Shadow Cabinet Secretary for the Economy, Samuel Kurtz said: “Labour promised that two Labour governments working together would deliver for Wales, yet all we have witnessed is confusion and infighting.
“There is now a clear breakdown in communication between UK Labour and Welsh Labour, leaving communities caught in the middle.
“Had a UK Conservative minister implemented these funding changes, the Cabinet Secretary and the Welsh Government would be in uproar.
“Yet because it is a UK Labour Government, the Welsh Government seems content to roll over and avoid making a fuss. The hypocrisy is stark.
“After 26 years of Labour mismanagement, Wales urgently needs growth, jobs, and investment.
“Only the Welsh Conservatives have a credible plan to reverse the damage of the past 26 years, revive our economy, and to fix Wales.”
A UK Government Spokesperson said: “There is no shortfall in funding for Wales. We are providing a record investment of £629 million over the next three years and working in lock-step with the Welsh Government to deliver real change.
“Targeted funding is central to this effort and our programme, including Pride in Place, will put local people in control of shaping the future of their high streets, businesses, and community spaces.”
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If this isn’t conspiracy to defraud it should be.
Shout out to the Whitehall massive.
Well done on upsetting exactly the right people with your honesty.
Those downvotes really showed you!
How about that. The dozen or so genuine folks unhappy with the idea of fair funding, good faith governance and respecting the devolution settlement had a collective change of heart.
See Larry Elliott’s very strong piece in today’s (Thurs) Guardian – “This is what betrayal looks like”. Ministerial Vandalism.
He also cites Steve Fothergill’s (Industrial Communities Alliance) report that the (Labour) government is putting a final end to any effective Regional policy, an end achieved at by both Conservative and Labour. Labour is not just a party and government devoid of any principle or purpose, it’s actually deeply corrosive.
Llinos Medi questions the UK Labour Government’s respect for Welsh devolution. Their disrespect is not confined to devolution for successive UK governments have repeatedly shown Wales utter contempt for centuries. I’m compiling a list of the number of cases of blatant UK government discrimination during the last century – I’ve reached over 20 and counting. This situation won’t change until our weak independence movement is strong enough to threaten their precious and beloved UK.
The current Welsh Labour government yet again being the dog that doesn’t bark in the night.
How do they justify their continuing abject failure to support and fight for even the limited self determination set out under the weak devolution agreement?
In truth, I’m not certain Welsh Labour are in fact rolling over. It’s very likely to be a situation of ‘not airing dirty laundry’ and having those negotiations privately. It certainly flies in the face of Eluned’s track record.
I can understand them diverting money – I wouldn’t trust the WG to do a proper Tesco shop, let alone spend millions of pounds effectively. Yet time and again Welsh Labour says absolutely nothing. They are facing electoral disaster, the UK PM is gravely weakened, and we are constantly being stitched up, yet nothing is said. Craven and shameful.
Which government gamed a PPE procurement process in a public health emergency to let their chums syphon off billions of your money?
The Tories of course but I don’t understand the relevance here?
The unelected Whitehall bureaucrats set up the VIP lane. The same bureaucrats that are now gaming this funding. Turns out it doesn’t actually matter which colour government is in power because the bureaucrats are running the show.
Firstly, 86m is not going get you very far in terms of regeneration across the entirety of Wales. But the other scenario is that Westminster sets up a system for managing these proposals. As England is a big single country, it’s staffed with enough civil servants that it actually can manage the program across the entire UK. Those overheads for running the program in England cutting into the overall funding to deliver outcomes. Westminster then devolves the LGF to WG who then sets up its own system and from experience that is around 20% of the remaining funding. In the… Read more »
More theft from Wales, more silence from the Sennedd wing of the westminster criminal gang.
As an Englishman I see this as a disgusting theft from the Welsh people , along with monies stolen from all Brits and given to other who have no right to it, this infiltrated govt is nothing more than a gang of pirates
Embezzlement is defined as theft or misappropriation of funds placed in one’s trust or belonging to one’s employer. In the latter case, we the voting public are the employer. I think the Serious Fraud Office needs to quit navel-gazing and do some serious work on tracing this missing money we taxpayers in Wales are owed.