Moray Council has expressed disappointment after confirmation that the Highlands and Islands Regional Economic Partnership will receive no allocation from the new Local Growth Fund.
The partnership, which includes Moray, had expected to benefit from the fund, which will replace the UK Shared Prosperity Fund from the 2026 to 27 financial year.
Confirmation was provided in correspondence from the Secretary of State for Scotland on 8 January 2026, which outlined that the UK Shared Prosperity Fund will end after 2025 to 26.
The UK Government has said a new, more targeted approach to local growth funding will be introduced through four programmes, including the Local Growth Fund.
Despite assurances that Scotland will receive more funding overall in cash terms over the next three years, the Highlands and Islands Regional Economic Partnership will not benefit from the new fund.
Moray Council has warned this represents a significant setback for a region that has relied on UK Shared Prosperity Fund investment to support economic growth, community development and skills programmes.
Under the most recent funding round, Moray received a total allocation of £1.415 million, including administration costs, which supported a wide range of local projects.
Moray Council said those projects delivered tangible benefits for communities, businesses and individuals across the area.
The council acknowledged continued UK Government investment through other programmes, including £32.5 million for the Moray Growth Deal, £20 million through the Pride in Place Programme for Elgin, and a further £20 million from the Levelling Up Fund.
However, council leaders said the absence of Local Growth Fund support raises concerns about sustaining momentum in areas previously backed through the Shared Prosperity Fund.
Council officers are now putting mitigation measures in place, including redeploying staff to alternative funding streams, using underspends to extend project delivery until September 2026, and exploring future service redesign options.
Kathleen Robertson said the decision was a serious disappointment for the region.
“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.”
Projects supported under the UK Shared Prosperity Fund in Moray included regeneration and town centre improvements, tourism strategy development, digital inclusion, archive digitisation, park upgrades, business support, apprenticeships, employability programmes and targeted help for people furthest from the labour market.
Moray Council said the loss of future funding under the Local Growth Fund risks leaving rural and island communities at a disadvantage at a time when long term economic resilience remains fragile.
