A new £140 million Scottish Local Growth Fund has been unveiled to support economic prosperity across five regions between 2026/27 and 2028/29. However, Aberdeen City and Aberdeenshire receive no allocation under the scheme, as the North East Regional Economic Partnership is not one of the five funded regions.
The UK Government says the programme targets areas with the lowest real disposable household income, with funding distributed via selected Regional Economic Partnerships. Local leaders in the chosen areas will shape investment plans focused on infrastructure, business support and skills.
Five Regional Economic Partnerships will share the £140 million, with allocations broadly linked to population. Glasgow and Edinburgh regions receive the largest sums, underlining their scale and central role in Scotland’s economy.
- 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
These funds will be managed by the REPs, which bring together councils, business, education and the third sector to deliver long-term economic strategies. A detailed allocation methodology has been published by the UK Government.
Aberdeen and the North East left out
Nine local authorities fall into REPs that do not receive any Local Growth Fund allocation, including the North East region covering Aberdeen City and Aberdeenshire. This means neither council will benefit directly from the £140 million pot, despite Aberdeen’s importance as an energy and innovation hub.
Other excluded areas include Argyll and Bute, Highland, Moray, Na h-Eileanan Siar, Orkney, Shetland and Dumfries & Galloway, which sit in the Highlands and Islands and South of Scotland groupings. While these areas may access other UK funding streams, they are not part of the Local Growth Fund’s current geographic focus.
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 the Pride in Place Programme, Growth Mission Fund, Freeports, Community Regeneration Partnerships, and 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 £320 million for Glasgow City Region and North East Scotland Investment Zones, £188 million to complete Levelling Up Fund projects and £752 million for Scotland’s 12 City Region and Growth Deals through to 2034/35. For the North East, future debates are likely to focus on how these wider programmes can offset the absence of Local Growth Fund support for Aberdeen and Aberdeenshire.
