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.”

The UK Government was invited to comment.