Local Growth Fund (Allocations)

First Minister’s Question Time – in the Scottish Parliament at on 15 January 2026.

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Photo of Keith Brown Keith Brown Scottish National Party

To ask the First Minister whether he will provide an update regarding the Scottish Government’s latest engagement with the United Kingdom Government in relation to the distribution of local growth fund allocations in Scotland. (S6F-04587)

Photo of John Swinney John Swinney Scottish National Party

Despite repeated requests over the past year, we have had no meaningful discussion with the UK Government on the local growth fund. The Secretary of State for Scotland wrote to us on the day of the announcement, stating that UK Government officials would be in contact, but we have no more detail on the programme. The announcement has come far too late.

The Scottish Government and local authorities repeatedly warned the UK Government that any reduction in funding would have a devastating impact, and we can now see that in the reports of some organisations issuing redundancy notices. The programme does not come close to matching the shared prosperity fund that it will replace, and it leaves nine Scottish local authorities with no allocation whatsoever.

Photo of Keith Brown Keith Brown Scottish National Party

The First Minister will be aware that, in Wales, the Welsh Labour Government will decide how to spend £547 million of local growth funding, whereas, in Scotland, it appears that the UK Government intends to spend Scotland’s £140 million for us.

At the same time, analysis shows that Forth Valley, which includes my Constituency, faces a cut of around a third compared with current funding levels, which threatens employability, skills and business support programmes that sustain local jobs. In my constituency, local groups will lose jobs.

Does the First Minister agree that that represents blatant political bias, with Scotland’s communities being not only short-changed—[ Interruption .] I do not know why the Tories do not like that being raised. Does he agree that Scotland’s communities are being not only short-changed but denied the right to decide their own priorities? While Labour politicians in Wales have defended devolution, they called Starmer’s approach a constitutional outrage. Is it not time for Labour MSPs in the Scottish Parliament to do the same or to accept that Scotland would be far better served by a Scottish Parliament that had the full powers of independence?

Photo of John Swinney John Swinney Scottish National Party

There are two issues that I want to address in response to the matter that Mr Brown has raised with me. The first is the fact that, when it comes to the quantum of support that is available, the resources that are available in Scotland are dwarfed by those that are available in Wales, so there is no equity in the arrangements that have been put in place.

The second point is that, in Wales, where there is a Labour Administration, the UK Labour Government has decided to allocate that money to the Welsh Government to enable distribution to take place in a way that is complementary to the priorities of the Welsh Government. That is a rational and logical position to adopt. In Scotland, the UK Labour Government has engaged in no dialogue with us whatsoever about the delivery of this funding, and it is being deployed in a way that was chosen by the UK Government with no regard paid to the priorities that are democratically agreed by this Parliament.

Worse than all of that, people in Scotland are now losing jobs because of the decisions of a Labour Government. When we add that to the decisions about employer national insurance contributions, it shows that the Labour Government is costing Scotland jobs. We cannot afford to have any more control from Labour in Scotland.

Photo of Alexander Stewart Alexander Stewart Conservative

Clackmannanshire has just received £9.8 million of investment through the local growth fund. That money came from the UK Government, as already has been discussed. It came openly, transparently and in partnership with local leaders. In contrast, the 2026-27 Scottish budget has been called “misleading” and “not good enough” by the Institute for Fiscal Studies.

Who is to blame for the flattering figures that have been identified by the Institute for Fiscal Studies and the Fraser of Allander Institute? Is it the Cabinet Secretary for Finance and Local Government, or is it the First Minister?

Photo of John Swinney John Swinney Scottish National Party

I think that we are going to have to have some consistency on the Conservative benches. Alexander Stewart has turned up and spoken to Parliament as an advocate and a cheerleader for the Labour Government in London, when his party leader is denouncing the Labour Government in London. The Conservatives have got to get their act together—or, should I say, those who are left, because many of them are getting chucked out because they are dabbling with Reform. It is all over for the Tory party.

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