Regional Policy Undermined Over a Decade, Impacting Struggling Areas in Wales and Beyond
A report by Steve Fothergill of the Industrial Communities Alliance highlights how regional policy in the UK has been quietly dismantled over the past decade due to decisions made by both Conservative and Labour governments, leading to diminished support for poorer regions.
The Conservatives abolished the assisted areas policy—which provided targeted help to disadvantaged regions—and post-Brexit subsidy rules now treat all regions equally, reducing focused investment. Although Labour opposed the abolition of assisted areas while in opposition, it has not sought to restore the policy since taking office.
An example illustrating the shift away from targeted regional investment is the construction of a Jaguar Land Rover battery plant in Somerset rather than Wales. The UK Shared Prosperity Fund, designed to replace EU funds after Brexit, only lasted three years and ended in 2024–25. In the 2024 budget, Chancellor Rachel Reeves cut the 2025–26 allocation from £1.5 billion to £900 million, a 40% reduction.
The Shared Prosperity Fund has been replaced by Local Growth Funds, with 2026 funding down 76% for England and Scotland and down 50% for Wales compared with 2024–25 levels. These Local Growth Funds possess significantly reduced financial firepower, and additional money allocated to councils is likely to be spent on adult social care and children’s services rather than job creation initiatives. Pride in Place initiatives remain too small to compensate for the lack of comprehensive regional policy.
Historically, regional policy has increased output and employment in less prosperous areas and there is a call to revive broader regional policies—including the restoration of assisted areas status—in the post-Brexit context.
In Wales, the valleys exhibit high incapacity benefit rates among working-age people, underscoring the urgent need for regional investment to tackle deprivation.
