No new Local Growth Fund allocation for Highlands and Islands Regional Economic Partnership

Correspondence from the Secretary of State for Scotland on 8 January 2026 confirmed that UKSPF will end after 2025/26, with a new, more targeted approach to local growth funding introduced through four programmes, including LGF. Despite government assurances that Scotland will receive more funding overall in cash terms over the next three years, HIREP will not benefit from LGF, marking a significant setback for the region.

Moray Council has successfully delivered a range of projects under UKSPF, with a total allocation of £1.415 million in the last funding round including an allowance for administration. These projects have supported economic growth, community development, and skills enhancement across Moray.

Moray Council acknowledges the UK Government’s continued investment through other programmes, including £32.5m for the Moray Growth Deal; £20m via the Pride in Place Programme for Elgin; and £20m from the Levelling Up Fund. However, the absence of LGF funding for HIREP raises concerns about sustaining momentum in local economic development in the areas previously supported.

Council officers are implementing mitigation measures to manage the impact of UKSPF ending, including redeploying staff to alternative funding streams, using underspends to extend project delivery until September 2026, and exploring future service redesign options.

Leader of Moray Council, Cllr Kathleen Robertson, said: “While we welcome ongoing UK Government investment in Moray, the lack of Local Growth Fund allocation for our region is deeply disappointing. The predecessor to this funding was principally to support rural areas like Moray and the projects delivered under UKSPF have made a tangible difference to our communities and businesses. This new LGF is moving funding away from Highlands and Islands areas and this is extremely disappointing. We will continue to engage with both UK and Scottish Governments to secure future funding opportunities and ensure Moray’s economic resilience.”

Key investments from the UKSPF in Moray include:

Communities and place

Projects led by Moray Council and partners in consultation with communities include regeneration and town centre improvements, community wealth building, tourism strategy development, support for digital inclusion and infrastructure improvements, development of third sector volunteering, digitisation of Moray’s archive collection and upgrades to Linzee Gordon Park. Community partners include Forres Conservation & Heritage Scheme, tsiMORAY and Buckie & District Community Council.

This theme was allocated a mix of revenue and capital totalling £642,025.29.

Local business

Projects include business support events, support for town centre development, social enterprise development, apprenticeship engagement and development, and a graduate placement scheme. Delivery partners include Moray Chamber of Commerce, DYW Moray, Business Gateway, Highlands and Islands Enterprise, and tsiMORAY.

This theme was allocated revenue funding totalling £240,786.28.

People and skills

The funding supports individuals who are furthest from the labour market to overcome barriers to employment. It provides youth work, personal development opportunities, and support for education and skills, with a particular focus on vulnerable young people leaving school. The funding will also offer intensive financial assistance to those who are economically inactive, underemployed, or unemployed. In addition, it supports the Moray Pathways SWAP vocational skills programme, tailored to meet local economic needs and contribute to sustainable economic growth. Moray Pathways and the Local Employability Partnership lead on delivery.

This theme received revenue funding totalling £481,572.58.