Announced on Thursday, 8 January, the programme aims to improve living standards by specifically targeting regions containing areas with the lowest real disposable household income per capita. This new investment is part of a broader commitment by the UK government to reduce poverty, lower inflation, and deliver material change to public services.

The funding is allocated over three financial years, from 2026/27 to 2028/29, across five major regions based on their population size. The Glasgow City Region will receive the most significant portion of the pot with £60.9m, followed by the Edinburgh and South East region, which has been allocated £37.8m.

The Tay Cities region is set to receive £19.5m, while Ayrshire and the Forth Valley Region will benefit from £11.8m and £9.8m respectively.

To ensure the funding creates maximum impact, the capital will be distributed through Regional Economic Partnerships (REPs). These are strategic collaborations involving local government, the private sector, education providers, and third-sector agencies. Mr Alexander noted that this structure allows “local leaders to decide how best to use the funding, which could include projects to improve infrastructure, business support or skills development”.

This initiative is the latest component of a wider UK government strategy that involves investing over £2 billion across Scotland over the next decade. The Local Growth Fund sits alongside other recently announced measures, such as the Pride in Place Programme and the Growth Mission Fund. While the specific investment themes are subject to full business case clearance, further details on the delivery of the fund are expected to be published later in the first quarter of 2026.