A new £140 million Scottish Local Growth Fund has been launched to support economic prosperity across five regions over the next three years. The UK Government says the programme will prioritise areas with the lowest real disposable household income, targeting investment where it can have the greatest impact on living standards.
Announcing the fund, Secretary of State for Scotland Douglas Alexander said the investment is designed to back regional economies while helping to reduce child poverty and bring down inflation. Local leaders will be given flexibility to shape spending plans, with projects expected to focus on infrastructure, business support and skills development.
Five Regional Economic Partnerships (REPs) will receive allocations between 2026/27 and 2028/29, with funding distributed broadly in line with population. Glasgow and Edinburgh city regions will receive the largest shares, reflecting their scale and economic importance.
- Glasgow City Region: £60.9 million
- Edinburgh & South East Scotland: £37.8 million
- Tay Cities: £19.5 million
- Ayrshire: £11.8 million
- Forth Valley Region: £9.8 million
Funding will be managed at regional level through the REPs, which bring together councils, business, education and the third sector to support long-term economic strategies. The detailed allocation methodology has been published separately by the UK Government.
The Local Growth Fund is intended to support projects that create skilled jobs and enhance people’s prosperity. That could include investment in transport and digital infrastructure, targeted business support, and programmes to develop the workforce in key sectors.
Before money flows, the programme is subject to full business case approval by the Department for Levelling Up, Housing and Communities and HM Treasury. Further detail on investment themes and delivery is expected later in the first quarter of 2026.
Twenty-three local authorities are covered across the five eligible REPs, including councils in Glasgow City Region, Edinburgh and South East Scotland, Ayrshire, Tay Cities and Forth Valley. These range from major urban councils such as Glasgow City and the City of Edinburgh to smaller authorities including Clackmannanshire, Angus and Midlothian.
Nine local authorities sit in REPs that do not receive an LGF allocation, including the Highland and Islands, North East and South of Scotland groupings. Areas such as Aberdeen City, Aberdeenshire, Argyll and Bute, Highland and Dumfries & Galloway are therefore not directly covered by the new fund.
The Local Growth Fund forms part of a wider package of more than £2 billion in UK Government investment in Scotland over the next decade. This includes programmes such as the Pride in Place schemes, Growth Mission Fund, Freeports, Community Regeneration Partnerships and ongoing City Region and Growth Deals.
Secretary of State for Scotland Douglas Alexander said: “By investing in local areas, reducing child poverty, and bringing down inflation, the UK Government is focused on delivering material change to people across the country – boosting living standards and improving public services.
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“The UK Government is today backing regional economies across Scotland with £140 million of new investment.
“This new investment will allow local leaders to decide how best to use the funding, which could include projects to improve infrastructure, business support or skills development. The UK Government will now work with local partners to develop investment plans tailored to each region.”
Headline commitments include £280 million for Phase 2 of the Pride in Place Programme, £320 million for Glasgow City Region and North East Scotland Investment Zones, and £752 million to deliver Scotland’s 12 City Region and Growth Deals through to 2034/35. Ministers argue this combination of funds will support local renewal, innovation and community ownership across the country.
