Welsh Economy Minister Rebecca Evans appeared to confirm this was the case in the Commons’ Welsh Affairs Committee under questioning from Medi.
Medi asked why it had been announced at the spending review that the fund was worth £633m over the three years, but October’s announcement of what the Welsh government would control put the figure at £547m, suggesting a shortfall of £86m.
While Evans said she was pleased the UK government had given decision-making powers on the growth funds to Wales, she added: “I understand that the decision was taken that some of the funding would be channelled through the Pride in Place fund.”
The scheme uses a law called the UK Internal Market Act (UKIMA) which allows the UK government to provide financial assistance in areas usually controlled by Cardiff without seeking permission from the Welsh government.
It allows the UK government to spend money on town centre improvements – something that is usually the responsibility of ministers in Cardiff.
The Welsh Labour government remains opposed to the legislation, which was first introduced while Boris Johnson was prime minister, and First Minister Eluned Morgan has discussed her concerns with current Prime Minister Sir Keir Starmer.
A strongly worded letter to Starmer released to the media last week said Pride in Place had caused “considerable unhappiness amongst Welsh Labour Senedd members”.
The 11 Labour MSs who signed the letter argued that the whole local growth fund should have been passed to the Welsh government, which managed EU funds before Brexit.