Spending Review 2025: Beyond the highlights
While most commentary on the Spending Review focused on the headline figures, I’ve focused here on a few of the issues likely to matter most to those of you involved in local economic development — including new funding pots, changes to the Green Book, and guidance on Local Growth Plans.
#1 Local Growth Fund
A new Local Growth Fund starts with long-term integrated settlements for Greater Manchester and West Midland, with London, North East, West Yorkshire, and Liverpool City Region set to follow in 2026.
Access depends on meeting a set of criteria: a directly elected Mayor in place for 18+ months, a Local Assurance Framework, no recent external reviews or interventions, and no serious financial concerns.
The fund is likely to be closely tied to roll-out of new Local Growth Plans:
#2 Growth Mission Fund
This fund will invest £240 million of capital from 2026 to 2030, with a focus on projects that support local job creation and regeneration. This aim is to fast-tract schemes that are already well-developed but have been delayed or stalled.
This fund is expected to prioritise projects that are already investment-ready. More details to come later in the summer.
With only £80 million per year across more than 300 local authorities in the UK, our concern is that if funding is distributed thinly across many authorities, the economic impact on each area will be limited.
#3 Regeneration Funding for 350 Communities
Funding will support 350 communities through long-term investment in neighbourhood regeneration – from public spaces and high streets to parks, youth facilities, libraries and swimming pools.
The focus seems to be on visible, community-facing improvements.
#4 Green Book Updates
The Green Book is being updated to introduce place-based business cases – a response to calls for a more equitable investment of public funds outside London and the South East.
In reality, the Green Book already allowed the use of place based assessment of you dig into the detail. We have been using the guidance to inform local project appraisal for many years, and hope the update will simplify the approach and reinforce existing good practice.
The guidance will be shortened and simplified, with additional business case training provided to local and regional government teams.
#5 Local Growth Plan Guidance
MHCLG has now published guidance for Strategic Mayoral Authorities on developing Local Growth Plans. The guidance also encourages Foundation Strategic Authorities and non-devolved areas to take a look – particularly those exploring greater devolution or developing local economic strategies.
