Five Scottish regional partnerships have received the first £52.1m from a three-year local growth programme designed to fund infrastructure, commercial space, employment, and skills projects in areas with weaker household incomes.
The money forms the first-year allocation from a £140m Local Growth Fund running from 2026/27 to 2028/29. Funding is being distributed through regional partnerships bringing together councils, businesses, education providers, enterprise agencies, skills bodies, and the third sector.
The Scotland Office said eligible regions were selected using gross disposable household income per head, directing the programme towards parts of Scotland where household resources are below those in stronger-performing areas.
Glasgow City Region has received the largest first-year allocation, at £22.68m, from a total three-year package of £60.9m. Edinburgh and South East Scotland has received £14.1m from £37.8m, while the Tay Cities Region has received £7.26m from a £19.5m allocation.
Ayrshire has received £4.4m from an £11.8m three-year allocation, while Forth Valley has received £3.67m from a total of £9.8m.
Scottish Secretary Douglas Alexander said the funding would support regional leaders “to create skilled jobs, help start up businesses and revive our local high streets”.
The programme gives regional partnerships discretion over how the money is used within agreed investment plans. Proposed activity includes physical infrastructure, commercial property intended to support higher-growth businesses, employment measures, and programmes addressing local skills shortages.
Regional growth constraints vary substantially. One area may lack suitable commercial premises, another can face transport bottlenecks, while employers elsewhere may struggle to recruit people with specific technical skills. Allowing investment plans to be set regionally is intended to match spending more closely to those differences.
The model also places greater emphasis on coordination between public bodies and employers, particularly where infrastructure and training need to develop together. Commercial property without a suitable skills base can struggle to attract occupiers, while training programmes deliver weaker returns when local employers cannot provide sufficient opportunities.
The government says the wider Local Growth Fund will provide £140m to Scotland over three financial years. Year-one funding was cleared to the accountable regional bodies around 28 August, allowing procurement and physical delivery to begin.
Future-year allocations will be released as regions progress through their plans, with regular updates and annual reviews used to assess delivery. The structure gives partnerships access to initial capital while linking subsequent funding to implementation.
Regional investment policy has increasingly focused on whether capital programmes can generate durable private-sector activity rather than stand-alone public projects. Commercial space, transport access, skills, and local business support can reinforce each other when aligned, while fragmented spending risks creating facilities without sufficient demand or training programmes without suitable employment.
Scotland’s regional economies also face different industrial transitions. Glasgow and Edinburgh have substantial services and technology clusters, while areas covered by the programme include businesses in manufacturing, energy, tourism, food production, logistics, and other sectors. Investment plans therefore need to reflect the composition and constraints of each regional economy.
The UK Government says it is investing more than £2.3bn over ten years in local and regional projects across Scotland through a range of programmes. The £140m Local Growth Fund sits within a broader policy shift towards place-based development and greater local control over delivery.
The immediate challenge for the five partnerships is execution. Capital programmes can take time to affect productivity or employment, and their economic return depends on projects moving through procurement and construction without lengthy delays.
The £52.1m release moves the programme from approved investment plans into delivery. Its eventual performance will depend on whether projects create viable commercial capacity, improve access to skills and employment, and attract additional private investment into the regions they are intended to support.
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