New UK Funds - Transition from UK Shared Prosperity Fund - Jan 2026 - AM reviewed
Renfrewshire Council · 20 January 2026
Back to Economy and Regeneration Policy Board — 20 January 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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PUBLIC ___________________________________________________________________ To: Economy and Regeneration Board On: 20 January 2026 ___________________________________________________________________ Report by: Chief Executive ___________________________________________________________________ Heading: New UK Funds - Transition from UK Shared Prosperity Fund ___________________________________________________________________ 1. Summary 1.1 This report provides an update to board of the recently announced UK Government funding programmes which replace UK Shared Prosperity Fund (UKSPF) from April 2026. 1.2 The report outlines the known position to date and the implications for the Council at this point. ___________________________________________________________________ 2. Recommendations 2.1 Board members are asked to: a) Note the contents of the report; b) Agree that the existing Invest in Renfrewshire budget be used to mitigate the expected loss in funding from next year (as proposed in section 9) with a fuller report coming back to Board when funding decisions are finalised. ___________________________________________________________________ 3. Background 3.1 The UK Shared Prosperity Fund (UKSPF) is being wound down (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 - all recently announced. 3.2 The precise delivery mechanics, final allocations to Scotland, and how UK-wide pots will interact with devolved responsibilities remain in development. The UK
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PUBLIC Spending Review and Budget statements have signalled overall headline amounts but details and guidance for local authorities in Scotland are still being released. 3.3 At the UKG Spending Review, 11 June 2025, a commitment was made to ‘regional growth and devolution’ and advised funding in Scotland, Wales and Northern Ireland would receive the same overall level in cash terms for 2026/2027 to 2028/2029 as it is for UKSPF 2025/2026 but through different programmes. 3.4 For Scotland this is approx. £76 million p.a., totalling approximately £238m over the three year period (up to FY 28-29). 3.5 There are four funding steams that make up the new funds for Scotland: • Pride in Place Programme (PIPP) Phase 2 • Pride in Place Impact Fund (PIPIF) • Local Growth Fund (LGF) • Growth Mission Fund (GMF) 3.6 The PIPP, PIPIF and the Growth Mission Fund were all confirmed on, or before, the Autumn Budget Statement (26 November 2025), with the new Local Growth Fund awaiting finalisation. 3.7 Around half of the Scottish allocation for next year is available through the PIPP, PIPIF and GMF programmes. Renfrewshire has not received a funding award through any of these programmes. 3.8 The New Local Growth Fund for Scotland was announced on 8th January 2026 and a full breakdown of this new fund is outlined in section 6 of the report. ___________________________________________________________________ 4. Pride in Place — Scotland: Announcements to Date 4.1 The Pride in Place (PiP) programme is a new regeneration fund designed to replace and expand elements of the UK Shared Prosperity Fund (UKSPF) by providing “long-term, community-led investment in Scotland’s most disadvantaged neighbourhoods”. PiP aims to give local people control over investment decisions to revitalise high streets, improve community infrastructure, boost local skills and jobs, and enhance wellbeing. Funding is provided over 10 years for neighbourhood-level regeneration. 4.2 PiP is supported by a separate, complementary capital allocation known as the Pride in Place Impact Fund (PIPIF), targeting rapid improvements in community spaces through shorter-term investments. 4.3 Together, these programmes make up one of the main UK Government replacement funding streams for local community regeneration funding formerly delivered under UKSPF. PiP and PIPIF emphasise capital investment, long time horizons, and local governance structures (Neighbourhood Boards) — marking a shift from the more flexible revenue-capital previous allocations.
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PUBLIC 4.4 In September 2025, the UK Government announced that up to £280 million would be invested across 14 Scottish neighbourhoods as part of the Pride in Place programme, covering 12 local authority areas. Each of these neighbourhoods is expected to receive up to £20 million over a 10-year period. 4.5 Funding is intended to support a broad range of regeneration activity including high-street and town centre revitalisation, housing, employment and skills support, health & wellbeing improvements, transport links, and heritage projects — with decisions taken by locally-appointed Neighbourhood Boards involving community representatives. 4.6 Communities were selected based on a combination of deprivation and social infrastructure need, with local authorities, MPs/MSPs and community organisations providing evidence to support nominated areas. 4.7 PIP Areas Covered in Scotland • Aberdeen City • City of Edinburgh • Falkirk • Fife (two areas) • Glasgow (two areas) • Highland • North Ayrshire • North Lanarkshire • South Ayrshire • South Lanarkshire • Na h-Eileanan Siar • West Lothian _________________________________________________________________ 5. Pride in Place Impact Fund (£12m) 5.1 Alongside the main PiP allocations, a Pride in Place Impact Fund (PIPIF) totalling £12 million was announced for eight Scottish local authorities. 5.2 These authorities will receive £1.5 million each over a two-year period (2025/26–2026/27) to deliver rapid, tangible improvements locally — such as enhanced public spaces, green spaces, leisure and sports facilities. 5.3 PIPIF Allocations have been made to eight Scottish councils: • Dundee City • East Ayrshire • Falkirk • Glasgow City • Inverclyde • North Ayrshire • North Lanarkshire • West Dunbartonshire 5.4 These funds are intended to deliver more immediate capital-eligible improvements such as public realm enhancements, community hubs, and high- street interventions.
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PUBLIC 5.5 The PiP programme also builds on an earlier (spring 2025) Plan for Neighbourhoods phase that saw 10 Scottish towns (Arbroath, Elgin, Peterhead, Dumfries, Irvine, Kilmarnock, Clydebank, Coatbridge, Greenock) identified for up to £20m investment previously. ___________________________________________________________________ 6. Growth Mission Fund 6.1 The Growth Mission Fund (GMF) - £40m for Scotland – was announced at the Autumn Budget 2025 (£20m each for Inchgreen and Kirkcaldy - subject to business case approval) ___________________________________________________________________ 7. Local Growth Fund (Scotland) 7.1 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. 7.2 It is explicitly designed as a replacement for the UK Shared Prosperity Fund which itself was originally designed to replace EU Structural Funds in the UK. 7.3 While detailed official guidance for the Scottish Local Growth Fund isn’t yet published, likely objectives will include: • Local economic growth and productivity improvements. • Support for businesses, skills, and communities. • Flexibility for locally-led investment choices. 7.4 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. 7.5 Another key change is that the programme is heavily weighted towards capital (70%), rather than revenue (30%), spend. 7.6 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 7.7 UKG have determined the LGF allocation methodology based on the regions of Scotland that have the lowest Real Disposable Household Income (RDHI) per capita. As a result, Glasgow City Region will receive 43.5% of the overall Scottish NLGF allocation over the three years of the funding period. However, it should also be noted that three Scottish regions: Highland, North-East Scotland and South of Scotland will not receive any NLGF allocation. Table 2, below, provides a breakdown of the full Scottish LGF allocation: 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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PUBLIC Table 2. REP LGF three-year allocations 7.8 Revenue funding in the previous UKSPF programme was 73%. The new methodology offer 30% revenue funding for the next three years programme. This significant reduction in revenue funding will mean cuts in core employability, business support, skills, innovation and third sector support across the City Region. 7.9 Table 3 provides a summary of the GCR UKPSF annual allocations versus the advised LGF allocations: Table 3. GCR UKSPF Allocations v’s GCR NLGF Allocations 7.10 The Revenue budget also reduces year on year, with an allocation of £4.8m in 2028/29 for the whole city region, down from £22m in 2025/26. ___________________________________________________________________ 8. Potential Impact of the Local Growth Fund Announcement for Renfrewshire 8.1 GCR still await further details from UKG on the rules of the programme, with the recent announcement stating: The LGF programme is subject to full business case clearance by MHCLG and HMT, and further details on the delivery of the LGF, including investment themes will be set out later in Q1 of 2026. 8.2 Now that funding is being allocated regionally (rather than locally) the GCR Intelligence Hub is in the process of developing a number of regional allocation methodologies which will be presented to the GCR Chief Execs Group on Thursday 12 February 2026 for consideration. 8.3 The overall reduction in funding allocations are significant; however the key issue is the change in the level of revenue funding which has dropped to 30% of the reduced pot. This will have a major impact on employability programme delivery and business support services within the authority area and across the GCR. Region Economic Partnership (REP) Total (3 Yr) NLGF Allocation Ayrshire £11.8m Edinburgh & SE £37.8m Forth Valley £9.8m GCR £60.9m Tay Cities £19.5m Total £140m Revenue Multiply (Rev) Capital Total SPF Y1 22/23 £5,190,309 £3,856,888 £2,226,783 £9,047,197 SPF Y2 23/24 £12,237,928 £4,450,257 £2,596,265 £19,284,450 SPF Y3 24/25 £29,463,268 £3,115,181 £9,402,317 £41,980,766 SPF Y4 25/26 £22,554,142 N/A £6,868,820 £29,422,962 NLGF 26/27 £6,900,000 N/A £15,800,000 £22,700,000 NLGF 27/28 £6,700,000 N/A £14,800,000 £21,500,000 NLGF 28/29 £4,800,000 N/A £11,900,000 £16,700,000
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PUBLIC 8.4 UKSPF currently represents around 20% (£1M) of the Council’s total employability funding and approximately 50% (£0.5M) of business development funding, supporting a substantial number of staff posts and contracted third- sector services. Our current estimate is that the £1.5M current allocation will reduce to around £500-600k for next year (to be finalised by GCR). 8.5 While revenue funding will fall substantially the capital allocation will rise from £0.5M to over £1M. ___________________________________________________________________ 9. Mitigation and Contingency Planning (Revenue funds) 9.1 While the potential impacts are substantial, the 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. 9.2 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 Renfrewshire Council finances or having to make quick decisions over loss of funding, disruption to services and staff redundancies. 9.3 As such, while the further drop in UK SPF / Local Growth Fund is a blow, especially following a 44% cut to that budget in the current financial year, plans were already in place to mitigate future funding disruptions and to safeguard services. 9.4 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. 9.5 As such, given the expectation of a significant cut to UK SPF / Local Growth Fund the same process will take place to manage the cuts over a longer period and therefore avoid having to make staff redundancies and large service cuts. 9.6 A fuller report on implications and future finances will be presented to a future Board once the Local Growth Fund allocations are finalised and the position is clearer. _________________________________________________________________ Implications of the Report 1. Financial – The report outlines a potentially significant drop in funding for key Council services. At this stage no additional funding is sought, the services involved will manage reductions over a number of years. All funding is accounted for within existing Council budgets and external funding. 2. HR & Organisational Development –funding secures the continuation of staff posts
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PUBLIC 3. Community/Council Planning –none 4. Legal – None. UK SPF / Local Growth Fund is routed through the Glasgow City Region and formal relationships are established with them. 5. Property/Assets – None. 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 Economy and Regeneration Policy Board, 23rd August 2022, “UK Shared Prosperity Fund Update” Economy and Regeneration Policy Board, 23rd May 2023, “UK Shared Prosperity Fund – Year 1 Report” Economy and Regeneration Board, 7 November 2023, “Shared Prosperity Funding: Business Challenge Fund” Economy and Regeneration Board, 5 November 2024, “Shared Prosperity Fund Update” Economy and Regeneration Board, 18 March 2025 “UK Shared Prosperity Fund 2025-26” ___________________________________________________________________ Author: Ruth Cooper, Economic Development Manager; Email: ruth.cooper@renfrewshire.gov.uk