A new fund which is set to deliver more than £500 million to Wales has been welcomed as a “vital opportunity to empower small businesses and drive economic growth”.
The Local Growth Fund replaces money that used to come from the European Union, with the Welsh and UK Governments agreeing a framework which will set priorities and processes for allocating the funds.
A delivery plan will be developed and led by the Welsh Government. It says local authorities and other partners will have a key role in deciding how the funding is spent, adding that it will consult later this month on the best way to use the funding.
FSB Wales and CBI Wales welcomed the announcement.
Joshua Miles, Head of FSB Wales, said:
“We warmly welcome the announcement of this money, which presents a vital opportunity to empower small businesses and drive economic growth across Wales. By prioritising support for job creation, skills development, and innovation through technology like AI and low-carbon energy, this fund can help small businesses overcome barriers they face to growth. We urge Welsh Government to ensure that small businesses and local communities are at the heart of the consultation process, so the funds foster sustainable growth, boost productivity, and create resilient regional economies throughout Wales.”
Russell Greenslade, CBI Wales Director, said:
“The announcement of the Local Growth Fund will be seen by businesses across Wales as a significant step in addressing the pockets of low productivity that continue to hold back the Welsh economy. The scale of investment signals a clear and welcome commitment to supporting enterprise, driving innovation, and levelling up communities in every region.
“To deliver the impact Wales needs, the fund must be deployed strategically, managed rigorously, and aligned with local strengths. Success will depend on strong collaboration between partners and a relentless focus on rapid delivery if we’re to truly unlock long-term growth, create high-quality jobs, and build economic resilience across all corners of Wales.”
The Welsh Government said it was 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
- help create and grow Welsh businesses in key sectors and boost investment in research and innovation, in areas such as health and bio-tech, financial technology, low carbon energy and AI
- 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.
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 £500 million 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.”
Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans, said:
“This new fund will focus on supporting regional growth and productivity, as well as tackling economic inequalities.
“We will now work at pace with our partners to prioritise investment in each region.”
The Welsh Government added that more information on the funding will be announced in the coming months.
