The UK Government has launched a £140 million Local Growth Fund (LGF) aimed at driving economic prosperity across Scotland. Announced by Scottish Secretary Douglas Alexander on 8 January, the programme will allocate funding across five regions over the next three years (2026/27 – 2028/29), with Glasgow City receiving £60.9 million, Edinburgh & South East £37.8 million, Tay Cities £19.5 million, Ayrshire £11.8 million, and the Forth Valley Region £9.8 million. The fund is designed to support projects that promote economic growth, such as infrastructure development, business support initiatives, and skills development programs, with the ultimate goal of creating skilled jobs and improving local prosperity.
Secretary Douglas Alexander emphasized that the investment will empower local leaders to determine how best to use the funding, tailoring projects to regional needs. The UK Government aims to use this investment to improve living standards, reduce child poverty, and support public services, ensuring that economic growth delivers tangible benefits for communities across Scotland.
The LGF will prioritize regions with the lowest Real Disposable Household Income per capita and will operate through Regional Economic Partnerships (REPs). These partnerships bring together local government, private sector organizations, education and skills providers, enterprise agencies, and the third sector to maximize the impact of funding and drive strategic regional development. Full business case approval by MHCLG and HMT is required, and further details on investment themes and delivery will be published in the first quarter of 2026.
This initiative forms part of a broader UK Government investment of over £2 billion in Scotland over the next decade, supporting a wide range of local and regional projects. These include programmes such as the Pride in Place Programme, Growth Mission Fund, support for Scottish towns, investment zones in Glasgow City Region and North East Scotland, community regeneration partnerships, the Levelling Up Fund, UK Shared Prosperity Fund transition funding, innovation funding, and City Region and Growth Deals. The Local Growth Fund is intended to complement these efforts, targeting areas in need of economic renewal and helping to deliver sustainable, long-term prosperity.
