THE Senedd’s economy committee is warning that Wales faces a significant funding reduction, job security risks, and doubts over whether new regional bodies can deliver the British government’s Local Growth Fund (LGF).

A report released today raises serious concerns about Welsh government proposals for the fund, which will provide Wales with £547 million over three years.

Committee chairman Andrew Davies MS said: “We heard that Wales is about to hit the anniversary from hell — a century of relative economic decline. 

“We need strong economic interventions to reverse this.”

“The Local Growth Fund must be a tool for reducing inequality and raising productivity — but the significant reduction in funding, concerns about regional delivery, and risks to skilled jobs pose major challenges.”

The committee expressed deep disappointment that Wales will receive substantially less through the LGF than via previous schemes. 

Annual funding will be almost half the level Wales received through the Shared Prosperity Fund in 2024-25.

The report warns that the shift from revenue-based to capital-heavy funding places skilled jobs at risk, potentially undermining the capacity to deliver effective economic development. 

It calls on the Welsh government to work with local authorities to minimise job losses.

Serious concerns were also raised about using corporate joint committees (CJCs) as regional delivery bodies, citing “astonishingly low job creation” in some areas under previous programmes. 

The committee recommends considering alternative models before finalising delivery plans.

The report stresses funding must be directed to areas of greatest need, recommending the Welsh government use the Index of Multiple Deprivation to target resources.