Local Growth Fund

Local Growth Fund
Name	Local Growth Fund
Established	2010s
Type	Regional investment program
Country	United Kingdom
Administered by	Combined Authorities
Fiscal years	2015–2021 (initial tranches)

Local Growth Fund

The Local Growth Fund was a United Kingdom initiative launched during the 2010s to support regional infrastructure and transport infrastructure projects through devolved funding mechanisms tied to Local Enterprise Partnerships and Combined Authoritys. It aimed to catalyse private investment, support High Speed 2 connectivity schemes, and coordinate with national initiatives such as the National Infrastructure Delivery Plan and the Northern Powerhouse. The programme operated alongside fiscal measures from the Treasury (United Kingdom) and policy frameworks set by the Department for Business, Innovation and Skills and later the Department for Levelling Up, Housing and Communities.

Background and Purpose

The Fund emerged after spending reviews and negotiations involving the Chancellor of the Exchequer and was shaped by policy debates at the Cabinet Office and within the House of Commons Treasury Committee. Designed to address regional disparities highlighted in reports by the Institute for Fiscal Studies, the Fund was linked to the devolution agenda advanced by the City Deals process and the formation of Greater Manchester Combined Authority and other devolved bodies. Its stated purpose echoed objectives in the Industrial Strategy and the Autumn Statement, seeking to foster productivity gains identified in analyses by the London School of Economics and the Resolution Foundation.

Funding and Administration

Funding rounds were announced in spending reviews negotiated by the Chancellor of the Exchequer and allocated via agreements involving Local Enterprise Partnerships, Combined Authoritys, and the Department for Transport. Administration relied on business cases assessed against criteria influenced by guidance from the Green Book and oversight from the National Audit Office and the Public Accounts Committee. Delivery partners included local councils such as Manchester City Council, Leeds City Council, and Birmingham City Council, alongside agencies like Highways England and transport authorities including Transport for Greater Manchester and Transport for London where applicable.

Allocation and Eligibility Criteria

Allocations were negotiated between the Treasury (United Kingdom) and regional leaders, often formalised in devolution deals signed with mayors such as the Mayor of Greater Manchester and the Mayor of London where overlapping schemes existed. Eligibility criteria required robust business cases referencing benefit–cost ratios aligned with standards from the Department for Transport and appraisals consistent with the Green Book methodology. Priority was given to interventions demonstrating alignment with regional strategies developed by Local Enterprise Partnerships and bodies such as the Midlands Engine and the Northern Powerhouse Partnership, and to projects with co-investment from private developers or institutions like the British Business Bank.

Projects and Investment Priorities

Funded projects included transport upgrades on corridors linked to High Speed 2, urban regeneration schemes in cities such as Bristol and Newcastle upon Tyne, and business park developments connected to science clusters like Cambridge Science Park and Oxford Science Park. Investment priorities mirrored objectives in the Industrial Strategy Challenge Fund and targeted skills and innovation partnerships involving universities such as University of Manchester, University of Leeds, University of Birmingham, and University of Oxford. Programmes also supported port improvements at Port of Liverpool and Teesport, and digital infrastructure collaboration with firms headquartered in Silicon Fen and Tech City, London.

Impact and Evaluation

Evaluation of outcomes drew on methodologies used by the National Audit Office and academic assessments from institutions including the London School of Economics and the Institute for Public Policy Research. Reported impacts included site-specific job creation in areas like Sheffield, improved journey times on corridors managed by Highways England, and increased private sector leverage in enterprise zones such as Humber Enterprise Zone. Independent scrutiny by the Public Accounts Committee and think tanks such as the Resolution Foundation examined whether projects achieved uplift in productivity and adhered to objectives outlined in the Industrial Strategy.

Criticisms and Controversies

Critics including commentators at the Institute for Fiscal Studies and members of the House of Commons Treasury Committee argued that allocations were politically influenced, favouring high-profile cities such as Manchester and Birmingham over less prominent counties like Cumbria. Concerns were raised about governance standards, transparency of business cases scrutinised by the National Audit Office, and the durability of funding commitments following statements from successive Chancellors of the Exchequer. Debates in the House of Commons and coverage in outlets reporting on public spending highlighted tensions between centralised spending control and devolved decision-making in bodies like the Greater London Authority.

Category:United Kingdom public finance