Updated Local Growth Fund Econ Regen 17 03 26 - AM reviewed
Renfrewshire Council · 17 March 2026
Back to Economy and Regeneration Policy Board — 17 March 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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OFFICIAL-SENSITIVE ___________________________________________________________________ To: Economy and Regeneration Board On: 17 March 2026 ___________________________________________________________________ Report by: Chief Executive ___________________________________________________________________ Heading: Local Growth Fund ___________________________________________________________________ 1. Summary 1.1 This report provides an update on the recently announced Local Growth Fund which was highlighted in the January 2026 Board paper “New UK Funds - Transition from UK Shared Prosperity Fund”. 1.2 The report provides an outline of the agreed funding to Renfrewshire for 2026- 27 and also confirms the savings and additional financial support required through Invest In Renfrewshire to mitigate the cut in funds from the previous UK Shared Prosperity Fund allocations. ___________________________________________________________________ 2. Recommendations 2.1 Board members are asked to: a) Note the proposed allocation of revenue funds (Local Growth Fund) to Renfrewshire Council for 2026-27 from the GCR allocation b) Note the expectation that this will be the only year where revenue funds are allocated to local authorities and that in future years Local Growth Fund will be held at the Regional Level, c) Note that capital funds (Local Growth Fund) will be held at GCR level with further guidance pending, d) Note the reduction in funds from the previous UK Shared Prosperity Fund allocations, and e) agree to the additional funding being provided through Invest in Renfrewshire.
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OFFICIAL-SENSITIVE ___________________________________________________________________ 3. Background 3.1 The UK Shared Prosperity Fund (UKSPF) is now in its final year (closing March 2026) and the UK Government is replacing and consolidating UKSPF and other levelling-up streams into a set of new funds — most notably a Local Growth Fund (announced on 8th January 2026 for Scotland) and place- focused programmes Pride in Place (PIP), Pride in Place Impact Fund (PIPIF) and Growth Mission Fund. These fund were all outlined at the previous (January) Economy and Regeneration Board. 3.2 The Local Growth Fund (LGF) for Scotland was announced on 8th January 2026. It is intended to begin in April 2026 and run for 3 years. 3.3 In a change from previous programmes, the Local Growth Fund allocations have been determined at a Regional Economic Partnership (REP) level, rather than individual Local Authority level. 3.4 Another key change is that the programme is heavily weighted towards capital (70%), rather than revenue (30%), spend. 3.5 Table 1 provides a summary of both the allocations for Scotland as a whole and Glasgow City Region specifically. Table 1. Scottish and GCR NLGF three-year allocations ___________________________________________________________________ 4. New Local Growth Fund – Policy Intent 4.1 On announcing the Local Growth Fund (LGF), UKG stated the programme will “fund regional projects which will drive economic growth. That might mean projects like infrastructure investment, business support, or skills development - projects which will make a real difference in terms of skilled jobs and people’s prosperity”. 4.2 While the Scottish LGF guidance is still awaited UKG have indicated it will follow a similar framework to the English guidance. The high-level logic model for Local Growth Fund, noted in Figure 1, provides the parameters for the programme; Revenue Funding Capital Funding Total Funding 2026/27 2027/28 2028/29 2026/27 2027/28 2028/29 2026/27 2027/28 2028/29 Scotland £15,800,000 £15,500,000 £11,000,000 £36,300,000 £33,900,000 £27,400,000 £52,100,000 £49,400,000 £38,400,000 GCR £6,900,000 £6,700,000 £4,800,000 £15,800,000 £14,800,000 £11,900,000 £22,700,000 £21,500,000 £16,700,000
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OFFICIAL-SENSITIVE Figure 1: LGF Logic Model 4.3 UKG have made clear the new LGF has a different policy focus from previous UKG funding and that ‘core revenue’ economic development activity should not be directly funded by UKG. However, following significant pressure from GCR and local authorities, they have indicated that given the reliance on UKSPF to support local authority funded activity, a ‘transition’ year would be considered, to provide some continuity of budget. This transition year allows an effective plus one year with each Member Authority receiving an allocation of the 26/27 revenue budget to allow some continuity of provision. 4.4 It should be noted that, even with individual allocations to Member Authorities, this is a very significant reduction in revenue funding for all of the city region’s member authorities. 4.5 Although the full guidance won’t be available until March 2026, UKG have confirmed that REPs are required to develop a ‘Credible Plan’ outlining proposed delivery over the 3-year funding period. This Credible Plan process will follow a similar approach taken for the original UKSPF Investment Plan in 2022 and agreed by GCR Cabinet. 4.6 While the capital funds remain at regional level, it was proposed that the UKSPF +1 year (2025/26) allocation methodology should be used to allocate the Revenue budget for 2026/27 to individual LAs. This approach will then enable individual MAs to plan for revenue funding in 2026/27, helping to support established business support and skills (employability) interventions. 4.7 Table 2 below provides a summary of the proposed revenue allocation to individual MAs for 2026/27. 2026/27 Proportion E. Dunbartonshire £269,100 3.90% E. Renfrewshire £255,300 3.70% Glasgow City £2,773,800 40.20%
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OFFICIAL-SENSITIVE Inverclyde £365,700 5.30% N. Lanarkshire £1,414,500 20.50% Renfrewshire £483,000 7% S. Lanarkshire £938,400 13.60% W. Dunbartonshire £400,200 5.80% Total £6,900,000 100% Table 2: LGF 2026/27 Proposed Allocation, based on 2025/26 methodology 4.8 For the capital allocation, UKG have emphasised the requirement for regional activity at scale and of impact, particularly where the intermediate outcomes are considered: • Increased development-ready land and sites • Increased housing supply • Improved utilities and energy upgrades • Increased physical connectivity • Increased digital connectivity UKG has confirmed in writing to the GCR PMO that ‘The entire LGF Capital funding allocation will need to be focussed on delivering regional outcomes’ and we await further clarity on what this will mean in practice. 4.9 With this guidance, it is proposed that the GCR PMO work with the Economic Delivery Group to develop an approach, for regional projects of scale, for consideration by Chief Executives’ Group and GCR Cabinet in due course. ___________________________________________________________________ 5. Service Implications of Revenue Funding Reductions 5.1 UKSPF 2025-26 currently represents around 20% (£1M) of the Council’s total employability funding and approximately 50% (£0.5M) of business development funding, financing a substantial number of staff posts and contracted third- sector services and supporting around 2,000 unemployed clients and 800 local businesses each year. 5.2 The revenue budget this past year (2025/26) of £1.5M is around £0.85M less than the previous year (24/25) and the year ahead (26/27) has now been proposed as £0.487M, a further drop of just over £1M. 5.3 While the financial changes are substantial, the Council’s economic development service is accustomed to significant funding disruptions with large swings in funding, financial uncertainty, late announcements of funding and very retrospective payment processes having been the norm for the last 15 years.
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OFFICIAL-SENSITIVE 5.4 As previously acknowledged, the Invest in Renfrewshire Programme Budget was established in 2011 to allow such issues to be managed strategically and effectively without putting a strain on council finances or having to make quick decisions over loss of funding, disruption to services and staff redundancies. 5.5 As such, while the further drop in UK SPF funding is a blow, especially following a 44% cut to that budget in the current year, plans were already in place to mitigate future funding disruptions and to safeguard services. 5.6 A number of cuts have already been made this year to cope with the reduced funds but more are now planned for the year ahead. This includes: • Moving the business team from 27 High St, Paisley (INCUBE) to locate to the Russell Institute (renting space back from SDS) with a saving on property costs. • Reducing business grants and consolidating the grants to still allow flexibility to support businesses with real growth potential and who require our support. • A reduction to LEP employability commissioning budget (final figures can’t be confirmed until SG budgets are finalised). • Reductions across a number of client funds, traineeship budgets and wage support to ensure further savings. • While there are no planned redundancies any vacancies throughout the year will be carefully considered and only filled when essential. 5.7 It is proposed that the Invest in Renfrewshire budget will contribute an additional £0.5M this year to help mitigate the loss of funds and to retain core essential employability and business services. ___________________________________________________________________ 6. Conclusions and Further Action 6.1 The Invest in Renfrewshire budget provides the opportunity for the service to have a multi-annual financial plan and to manage funding peaks and troughs. When a reduction (or increase) in funding is announced the services are realigned, savings are made, and external funding is prioritised to ensure that the Invest safety net of having a long term financial plan is not compromised. At the moment, even with the increased support required, there is funding to ensure a minimum five year plan for the service. 6.2 Officers will continue to work with the Glasgow City Region team to develop the three year “Credible Plan” to be submitted to UKG. 6.3 Further reports will come back to board on any developments and, in particular, to outline the future plan for the LGF capital funds that remain at the regional level. _________________________________________________________________ Implications of the Report 1. Financial – No additional funding is sought. All funding is accounted for within existing Council budgets and external funding.
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OFFICIAL-SENSITIVE 2. HR & Organisational Development –funding secures the continuation of staff posts 3. Community/Council Planning –none 4. Legal – None. UK SPF and LGF is routed through the Glasgow City Region and formal relationships are established with them. 5. Property/Assets – the report outlines the Councils intended move from 27 High Street from 31st March 2026 6. Information Technology – None. 7. Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. 8. Health & Safety – None. 9. Procurement – None. 10. Risk – None. 11. Privacy Impact - None. 12. Children’s Rights - None 13. COSLA Policy Position – Not Applicable. 14. Climate Risk – Not Applicable. __________________________________________________________________ List of Background Papers • “New UK Funds - Transition from UK Shared Prosperity Fund” Economy and Regeneration Policy Board, January 2026, __________________________________________________________________ Author: Ruth Cooper, Economic Development Manager; Email: ruth.cooper@renfrewshire.gov.uk