Row over £38m cut to Welsh funding under new Local Growth scheme

First Minister admits settlement is “slightly smaller”

The Welsh Government confirmed it will launch a consultation later this month to decide how the money is spent. Ministers in Cardiff say the fund will be used to support skills, help businesses in key sectors such as health and AI, and tackle barriers to growth.

First Minister Eluned Morgan said the settlement represented around 22% of the UK‑wide fund and pledged it would “reach all parts of Wales”. She admitted, however, that the package was “slightly smaller” than the previous scheme, adding: “Let’s remember, we always knew there was a price to pay for Brexit.”

UK Government Welsh Secretary Jo Stevens said decisions about spending were “best made by people in Wales” and stressed that ministers in London were working with Cardiff to deliver growth and opportunity.

Kurtz: “Wales was promised more, not less”

Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, Samuel Kurtz MS, said the change represented a broken promise to Wales.

“Under Labour, Wales was promised more funding, not tens of millions of pounds less,” he said.

“The Welsh Labour Government getting to hold the purse strings does not fill me with hope, as they routinely waste taxpayers’ money on vanity projects like the creation of more politicians or on non‑devolved areas like their pointless overseas embassies and Ugandan tree planting.

“This funding should be used to support struggling Welsh businesses who have had to contend with Labour Governments at both ends of the M4 hitting them with higher taxes.”

Plaid Cymru and Reform also weigh in

Plaid Cymru’s economy spokesperson Luke Fletcher MS said the new fund only “notionally” replaced the EU structural funds Wales lost after Brexit, warning that £500m over three years “falls far short of what’s required to tackle decades of underinvestment and deep‑rooted deprivation.”

A Reform UK Wales spokesperson also criticised the settlement, claiming Labour and Plaid Cymru were responsible for the poor state of the Welsh economy.

From EU billions to a smaller UK pot

Large parts of Wales qualified for EU structural funds during Britain’s membership, receiving around £375m a year. That support was replaced by the Shared Prosperity Fund, worth £585m over three years, but structured without direct Welsh Government control.

The new Local Growth Fund replaces that scheme, with a framework now agreed between the Labour UK Government and ministers in Cardiff. The £547m allocation will be split between capital spending on infrastructure and revenue for services, though the exact balance has not yet been confirmed.

The announcement comes ahead of the Welsh Government’s draft budget, due to be published on Tuesday. Ministers will need to secure support from another party in the Senedd to pass it early next year.

Related coverage

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• South West Wales to share in £214m Pride in Place investment

#Budget #ElunedMorganMS #FirstMinister #funding #LukeFletcherMS #politics #SamuelKurtzMS #SharedProsperityFund #WelshGovernment

Work begins on Port Talbot electric arc furnace as steelworks transition moves forward

Construction has begun on Tata Steel’s £1.25bn electric arc furnace (EAF) in Port Talbot, marking a major milestone in Wales’ industrial transformation—but it comes with the loss of more than 2,800 jobs and the end of traditional steelmaking in the town.

Business Secretary Jonathan Reynolds, Welsh Secretary Jo Stevens, and Tata Group Chairman Natarajan Chandrasekaran formally broke ground at the steelworks site on Monday (14 July), signalling the start of a project designed to cut carbon emissions by 90% and shift production toward recycled scrap steel.

The UK Government has committed £500 million toward the EAF, describing it as “a major win” for Welsh steelmaking that secures 5,000 jobs nationwide. The new furnace will replace the site’s two blast furnaces—shut down in September 2024—ending a century of primary steelmaking in Wales.

‘Bitter sweet’ day for steelworkers and families

The announcement has been widely described as bittersweet. While Tata and ministers hailed the start of a cleaner, greener future, union representatives and local leaders stressed the impact of the redundancies and the uncertainty still facing thousands of workers.

Assistant General Secretary Alasdair McDiarmid of Community Union said:

“This bittersweet day is a consequence of the devastating closure of the blast furnaces, but importantly a future for Port Talbot steelmaking is being secured.

The workforce needs the electric arc furnace project to be both a success and a turning point… Going forward we must see further investment to develop and grow the business, both here in Port Talbot and across all the crucial downstream sites.”

Speaking ahead of the groundbreaking, First Minister Eluned Morgan said the construction phase represents “a tangible sign” of Tata’s commitment, adding that the Welsh Government is working with partners to support affected workers and promote economic resilience.

Former steelworker Graham Rowland said:

“I’ve seen good boys lose their jobs… This industry kept this town alive. It’s the heart and soul of the place. If anywhere can make that arc work, it’s Port Talbot. The knowledge, the grit, the people—it’s all here. We just need the right support.”

Related stories from Swansea Bay News

Job losses confirmed as Tata Steel sets timetable for blast furnace closures
Explores the closure of Port Talbot’s heavy-end and its impact on workers.

Port Talbot regeneration fund launched to support steelworker transition
Details funding pledged to support displaced workers and local communities.

Celtic Freeport: what it means for the local economy and green infrastructure
Examines future investment opportunities connected to Port Talbot’s green transition.

EAF: cleaner steel, fewer emissions—but far fewer jobs

Tata Steel says the new furnace is essential to achieving climate targets and creating “a financially and environmentally sustainable future.” The company has reported losses of £4bn in Port Talbot since 2007.

Chairman Natarajan Chandrasekaran said:

“This is a proud day for the Tata Group, Tata Steel and for the UK. At Port Talbot we are building the foundations of a cleaner, greener future—supporting jobs, driving innovation and demonstrating our commitment to responsible industry leadership.”

The new furnace will be built on the site of the Basic Oxygen Steelmaking (BOS) plant and is set to be one of the largest of its kind globally, capable of producing up to three million tonnes of steel per year. Contractor Sir Robert McAlpine has been appointed to deliver the build, which will also include a new scrap processing plant.

Operations are expected to begin in late 2027. In the meantime, Port Talbot will continue to roll imported steel slabs through its hot strip mill and finishing lines.

Supporting workers through the transition

Neath Port Talbot Council and the Tata Steel / Port Talbot Transition Board have pledged over £100 million to support workers, businesses and community recovery. This includes:

• A £19.8 million Employment and Skills Fund
• A £21.2 million investment in Harbourside manufacturing and skills facilities
• A £13 million business start-up and resilience programme
• Additional community grants targeting financial hardship, mental health and career retraining

A recent survey by Public Health Wales found that 74% of local households expect to face financial pressure in the coming months, with food, energy, and housing cited as key concerns.

Council Leader Cllr Steve Hunt said:

“On behalf of the Transition Board, Neath Port Talbot Council is delivering targeted support to people and businesses both within Neath Port Talbot and further afield.”

Looking ahead

While the shift to EAF production represents a landmark shift in Welsh industry, many argue the transformation must be judged not just by its carbon savings, but by the long-term outcomes for workers, communities and supply chains.

Luke Fletcher MS, Economy spokesperson for Plaid Cymru and Senedd Member for South Wales West, said the start of construction is “welcome,” but warned that “the opportunity has been lost to safeguard over 2,000 primary steelmaking jobs.”

“Labour has promised a lot to the communities in and around Port Talbot,” he said, “it’s vital that those promises are realised now.”

Swansea Bay News will continue to follow developments across Port Talbot and the steel sector as this historic transition unfolds.

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Tourism tax gets Senedd approval: councils to decide on £1.30-a-night levy from 2027

The Visitor Accommodation (Register and Levy) Etc. (Wales) Bill was approved by 37 votes to 13, paving the way for a £1.30 per person per night charge on hotel, B&B and self-catering stays, plus VAT. A reduced rate of 75p will apply to hostels and campsites, with under-18s exempt from the lower rate.

The Welsh Government says the levy will help fund improvements to local tourism infrastructure, including toilets, footpaths, beaches and visitor centres, with all revenue reinvested in the communities where it is raised.

Finance Secretary Mark Drakeford described the measure as a “small contribution that will make a big difference,” adding:

“Visitor levies are used successfully all over the world… We want the same for Wales.”

The bill also establishes a national register of visitor accommodation providers, laying the groundwork for future licensing and offering better data on the sector’s scale and impact.

If implemented across all 22 Welsh councils, the levy could raise £33 million annually, though only Cardiff and Anglesey have so far indicated plans to adopt it. Other councils are expected to consult locally before making a decision.

The move follows Swansea Bay News’ earlier coverage of the debate surrounding the tax, which has divided opinion across the tourism sector and political spectrum. Critics warn the levy could deter visitors and harm the economy, particularly in rural areas reliant on seasonal trade.

Sam Rowlands, Conservative shadow finance secretary, called the bill “bad for Wales and bad for the Welsh tourism sector,” citing industry concerns and potential job losses.

But supporters argue the measure will help balance the pressures of tourism with the needs of residents. Plaid Cymru’s Luke Fletcher said:

“There is a genuine opportunity here for us to create a sustainable tourism sector that works with both our communities and businesses.”

Labour’s Jenny Rathbone added:

“Why should poor people rather than visitors have to pay?”

The legislation marks the first locally designed tax in Wales for over 500 years, and comes as part of the Welsh Government’s broader investment in tourism, including a £50m Wales Tourism Investment Fund and new weather-proofing grants.

For more background on the debate, see our earlier report: Will it support tourism or devastate the sector?

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