Local Growth Fund (Scotland, Wales and Northern Ireland): Technical note
Published 23 March 2026
Applies to Northern Ireland, Scotland and Wales
© Crown copyright 2026
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/local-growth-fund-scotland-wales-and-northern-ireland/local-growth-fund-scotland-wales-and-northern-ireland-technical-note
Summary
This technical note relates to the Local Growth Fund in Scotland, Wales & Northern Ireland.
A Welsh language version of this guidance will follow.
Purpose: Funding made available up to March 2029 to drive growth and improve living standards across Scotland, Wales and Northern Ireland.
Type of Fund: Allocative
Eligibility: As set out in Investment Plans for each nation, and in sections 3 and 4 below.
Funding available: £815.3 million over 2026-27 to 2028-29, comprising:
- Northern Ireland - £129 million
- Scotland - £139.9 million
- Wales - £546.5 million
Important dates:
Funding period: 1 April 2026 to 31 March 2029
1. Introduction
1.1. In the 2025 Spending Review, the UK Government announced a new targeted approach to local growth funding, comprising a set of interventions to drive growth and strengthen communities across the UK.
1.2. The Local Growth Fund forms part of this approach, with a focus on supporting each nation to deliver long-term investments for sustained economic growth. Through this Fund, the UK Government is investing in transformational programmes and projects that will create lasting jobs and opportunities in Scotland, Wales and Northern Ireland.
1.3. Nation-specific approaches to operating the Local Growth Fund are essential. In Wales and Northern Ireland, the Welsh Government and Northern Ireland Executive are responsible for the Fund, and in Scotland, the UK Government is responsible and is working directly with five Regional Partnerships to deliver the Fund.
2. Fund objectives
2.1. The Local Growth Fund contains a mix of capital and revenue funding designed to support efforts to boost gross domestic product (GDP) and real household disposable income (RHDI) to deliver improved economies and higher living standards across Scotland, Wales and Northern Ireland through three interconnected investment themes:
- Enabling local growth infrastructure
- Support for businesses
- Skills and employment support
2.2. Each nation’s priorities will be set out in an Investment Plan, agreed with the UK Government. Each nation Investment Plan will address the investment themes, but individual priorities and objectives will be designed by each nation specific to their needs and opportunities.
3. Accountability for delivering the Fund
3.1. Across the UK, MHCLG will maintain oversight of the overall Local Growth Fund and is responsible for periodic reporting to the UK Parliament on the Fund. Each nation will work in partnership with MHCLG to report on the delivery of the Local Growth Fund to allow MHCLG to carry out this function, and maintain a UK-wide picture of progress. An annual review process will also support MHCLG to maintain oversight of progress in each nation.
3.2. In Scotland, the UK Government will retain overall responsibility for the Fund. It is intended the Fund will be delivered through five Regional Partnerships - Glasgow City, Edinburgh & South East Scotland, Tay Cities, Ayrshire and Forth Valley. These regional fund delivery partners will set out priorities in individual regional Investment Plans, agreed with the UK Government.
3.3. In Wales, the Welsh Government and its Accounting Officer will plan and oversee delivery of the Fund. Details of the Welsh Government’s plans are set out in the Investment Plan agreed with the UK Government. A Memorandum of Understanding describes how the Welsh and UK Governments will work together over the programme period.
3.4. In Northern Ireland, the Northern Ireland Executive departments and their Accounting Officer(s) will plan and oversee delivery of the Fund, with the exception of the delivery of skills and employment support and business advice in 2026-27, which will be managed by MHCLG directly[footnote 1]. A Memorandum of Understanding will describe how the Northern Ireland Executive and UK Government will work together over the programme period.
4. Funding for each nation
4.1. The quantum of Local Growth Fund allocated to each nation is*:
| Resource (£m) | Capital (£m) | Total (£m) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 26-27 | 27-28 | 28-29 | 25-26 | 26-27 | 27-28 | 28-29 | 25-26 | 26-27 | 27-28 | 28-29 | |
| Scotland | £15.8 | £15.5 | £11.0 | £- | £36.3 | £33.9 | £27.4 | £- | £52.1 | £49.4 | £38.4 |
| Wales | £50.9 | £60.2 | £53.1 | £- | £116.9 | £132.6 | £132.7 | £- | £167.8 | £192.9 | £185.8 |
| Northern Ireland | £11.8 | £15.5 | £13.2 | £3.8 | £27.4 | £27.5 | £29.8 | £3.8 | £39.2 | £43.0 | £43.0 |
| Total Fund | £78.6 | £91.2 | £77.4 | £3.8 | £180.6 | £194.1 | £189.8 | £3.8 | £259.2 | £285.3 | £267.2 |
1. Figures are shown in £m and rounded to the nearest £0.1 million. Totals may not sum due to rounding.
2. The quantum includes the Northern Ireland share of funding derived from the Pride in Place Programme (Phase 2) and Pride in Place Impact Fund for 2025-26 to 2028-29, that will be delivered as part of the Local Growth Fund.
4.2. Allocations for Scotland’s Regional Partnerships are published at Local Growth Fund (Scotland): Place selection and allocation methodology note.
4.3. Allocations within Wales are set out in the Wales Investment Plan.
4.4. All delivery in Northern Ireland will be managed at the Northern Ireland scale.
5. Reporting and monitoring
5.1. Each accountable fund lead will design their own reporting and monitoring arrangements in order to fulfil respective responsibilities. Twice a year, in May and November accountable fund leads will be asked to share a progress report with the UK Government (using an online tool) describing:
- progress on the implementation of the Local Growth Fund
- actual spend across the three Local Growth Fund themes in the reporting period, based on spend incurred by organisations delivering Fund activities
- actual metrics achieved across the three Local Growth Fund themes
- committed spend across the three Local Growth Fund themes
- spend, outputs and outcome forecasts for the current financial year across the three Local Growth Fund themes
- spend and output and outcome forecast for the full period of the fund across the three Local Growth Fund themes
5.2. In addition, so that all governments and partners can collectively understand how and where the funding is used, accountable fund leads will also be asked to make available summary information on each of the funded projects. This will comprise of: project name, delivery organisation and type, a brief project description, total budget, Fund contribution, project location, start and end date, as well as the project objective and project type.
5.3. The data provided to the UK Government will be used:
- for oversight of the progress of the Local Growth Fund. This will enable MHCLG to undertake its responsibility to the UK Parliament
- to inform relevant UK Government Ministers and departments, where appropriate, on the delivery and impact of the Local Growth Fund on shared policy areas
- to support evaluation
5.4. Alongside formal monitoring and reporting, the UK Government and accountable fund leads will also meet quarterly to share progress.
5.5. At the end of each financial year, an Annual Review process will take place considering delivery performance, including spend and underspends, and the impact on deliverables, governance and assurance matters, allocations and any specific delivery challenges or opportunities. Payments for 2027-28 and 2028-29 will be made following the outcome of the Annual Review process.
6. Progress metrics
6.1. Accountable fund leads will be asked to collect data on relevant Local Growth Fund metrics as set out in their respective Investment Plans. A consolidated list of UK Government outputs and outcomes is set out here, though only a selection will be relevant to each Investment Plan: LGF outputs and outcomes.
6.2. Delivery partners or fund applicants should refer to each nation’s accountable fund lead and associated national documents once available for full details of which metrics are applicable. This may include nation-specific metrics, as well as UK Government outputs and outcomes.
7. Investment Plan changes
7.1. Investment Plans will set out the activities to be funded with each accountable fund lead able to respond to changes in the operating environment over the period to 31 March 2029. This means that financial forecasts are indicative and can be changed as plans are refined and delivery progresses.
7.2. Changes will be routinely captured in the regular monitoring, reporting and engagement mechanisms set out in section 5. So Investment Plans can be responsive to need, changes that fall beneath the thresholds defined in paragraphs 7.3 to 7.4 do not require prior approval by the UK Government.
7.3. A material change to what is delivered is a single or cumulative reprofiling of funding from one Local Growth Fund theme (or equivalent) that changes the total planned spend in a theme by 30% or more. Changes will be benchmarked against the initial forecast provided in the agreed Investment Plans. The impact of any changes on Fund metrics will need to be considered. Where a material change has already been made, that will provide the benchmark.
7.4. Any novel or contentious reprofiling that changes the total planned spend in a theme by between 15% and 30% will also require approval by the UK Government via regular discussions or annual review.
7.5. These thresholds will also apply to the Regional Partnerships in Scotland to optimise delivery. It will be for the Welsh Government and Northern Ireland Executive to consider any flexibilities they provide to their delivery partners as part of their management of the Fund.
8. Payments
8.1. Accountable fund leads will be paid their Local Growth Fund allocation annually. Each accountable fund lead will consider payment arrangements with their own delivery partners in accordance with their own systems and processes.
8.2. The reporting and monitoring section describes the annual review process which will inform the annual payment to the accountable fund leads. This process may lead to changes to payment profiles, for example in the event of significant underspends against the original profile.
8.3. Any underspends reported at the end of the programme period in March 2029 will be returned to the UK Government.
9. Eligible costs
9.1. Eligibility of costs may be set out by each of the accountable fund leads to delivery bodies and to organisations delivering projects based on their own processes, best practice, and governance.
9.2. To ensure value for money and impact, each accountable fund lead will need to consider and determine the appropriate mix of funding from the private, public and third sectors.
9.3. Accountable fund leads may allocate part of their Local Growth Fund to administer the Fund. To ensure the maximum impact for communities supported, this should be the minimum actual cost required. As a guide this should not normally exceed 4% of the overall allocation.
9.4. Capital costs will be defined in line with the standard accounting practice, directions, and guidance provided by each of the accountable fund leads.
9.5. The following costs are not eligible for support:
- paid for lobbying, entertaining, petitioning or challenging decisions, which means using the Fund to lobby (via an external firm or in-house staff) in order to undertake activities intended to influence or attempt to influence Parliament, government or political activity including the receipt of funding; or attempting to influence legislative or regulatory action
- payments for activities of a party political or exclusively religious nature
- VAT reclaimable from HMRC. Irrecoverable VAT is an eligible cost under the Local Growth Fund in Scotland, Wales & Northern Ireland
- gifts, or payments for gifts or donations
- statutory fines, criminal fines or penalties
- payments for works or activities which the lead local authority, project deliverer, end beneficiary, or any member of their partnership has a statutory duty to undertake, or that are fully funded by other sources
- contingencies and contingent liabilities
- dividends
- bad debts, costs resulting from the deferral of payments to creditors, or winding up a company
- expenses in respect of litigation, unfair dismissal or other compensation
- costs incurred by individuals in setting up and contributing towards private pension schemes
10. Capital assets
10.1. If the Local Growth Fund is used to develop, create, purchase or improve capital assets, in particular but not exclusively land and property, appropriate controls and monitoring arrangements that ensure the asset is used for the purpose for which funding was awarded for a reasonable period should be put in place. Controls and monitoring should allow for recovery of funding from the recipient if assets are sold or cease to be used for purposes for which funding was provided, in full or in part.
11. Assurance
11.1. We recognise that each accountable fund lead will have the necessary governance and assurance arrangements to ensure that all legal and other statutory obligations and consents will be adhered to, including but not limited to subsidy control, procurement, equalities and data protection.
12. Fraud Risk Assessment (FRA) and due diligence
12.1. Accountable fund leads will also ensure delivery bodies manage fraud risk and due diligence on third parties receiving Local Growth Fund monies. This includes ensuring the following minimum standards are met:
- following UK or devolved government Grants Functional Standards on Fraud Risk Assessment (FRA) and due diligence
- undertaking FRAs and due diligence at an appropriate level to each individual project dependent on risk
- ensuring that Local Growth Fund expenditure is undertaken in accordance with an effective fraud prevention and due diligence policy and procedure.
13. Branding and publicity
13.1. In all places, the Local Growth Fund will make use of ‘Funded by UK Government’ branding, alongside any nation-specific branding. We expect accountable fund leads will engage with the UK Government as required on proactive and reactive communication about the fund, to maximise awareness of the impact of the Fund on communities across the UK.
13.2. Accountable fund leads will lead on communication and publicity for their respective Local Growth Fund activities, ensuring UK Government has clear visibility of this activity.
14. Evaluation
14.1. Accountable fund leads may use Local Growth Fund monies to pay for evaluation activity as set out in their agreed Investment Plan. Where appropriate, the UK Government should be consulted and engaged in evaluation activity.
14.2. Where appropriate, accountable fund leads may be asked to participate in facilitated sessions, including peer-to-peer learning and wider reviews during the life of the programme.
15. Relevant links
15.1. Further information and relevant contact information for each nation can be accessed at the following links:
15.2. In Northern Ireland, the Northern Ireland Office and the Northern Ireland Executive will work in partnership to design and deliver the Local Growth Fund in Northern Ireland. An Investment Plan for Northern Ireland will be drafted by the Northern Ireland Office and Northern Ireland Executive following a consultation exercise which will launch in Spring 2026.
15.3. Any questions regarding the overall approach to the Local Growth Fund for the UK Government can be sent to LGFSWNI@communities.gov.uk.
-
Arrangements for the delivery of these projects will be set out in agreements between MHCLG and the project deliverers. ↩