A fund of more than half a billion pounds will replace money that used to come from the European Union and create jobs and grow productivity across Wales, the Welsh Government has said.

Decisions about how the money from the Local Growth Fund will be spent will return to Wales, honouring the UK Government’s manifesto commitment to restore decision-making on money that previously came from the EU.

The Welsh and UK Governments have agreed a framework which will set priorities and processes for allocating the funds, with a delivery plan developed and led by the Welsh Government.

Local authorities and other partners will have a key role in deciding how the funding is spent.

Later this month, the Welsh Government will consult on the best way to use this funding through a consultation.

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.”