Councils in county areas face a ‘cliff edge’ for economic growth funding next year, jeopardising their ability to support small businesses and create jobs, as the government winds down its UK Shared Prosperity Fund (UK SPF).
Worth £900m for England’s county areas since 2022, the UKSPF has been spent by unitary local authorities, county councils, and district councils in those places. The government is replacing it with a new Local Growth Fund for areas with established mayors and its neighbourhood-level Pride in Place programme.
But several areas, including large rural unitary councils such as Buckinghamshire, Shropshire and West Northamptonshire, alongside places like Devon, are set to receive nothing from both funding streams, which one local authority said would lead to ‘the total collapse of the post-EU settlement for growth funding for local areas’.
Many county areas are represented by elected leaders rather than a mayor but the vast majority will not receive any of the new Local Growth Fund through these plans. For those places that had negotiated a future mayoral devolution deal, the government announced this month that elections for mayors in several county areas will no longer be held next year, postponing them until 2028.
Whilst the Pride in Place programme is a £2m-a-year fund, it is specifically targeted towards specific neighbourhoods, rather than for the county as a whole. With some areas’ allocations lower than what they had previously received under SPF, and amidst concerns local authorities will have a limited role in the programme, no council surveyed by the County Councils Network (CCN) said Pride in Place was an adequate replacement for UK SPF.
Over the last few years, local authorities in county areas have spent the SPF on ‘growth hubs’, supporting thousands of businesses, particularly new start-ups or those in emerging industries. They have also used the funds for specialist support in creating jobs, helping residents back into employment, as well as projects to improve town centres.
A survey carried out by the CCN to assess the impact of the UK SPF ending found that: A survey carried out by the County Councils Network (CCN) shows the impact on its member councils if the UK SPF is not adequately replaced:
- Nine in ten councils are concerned their areas will not receive any money from the Local Growth Fund and no respondents thought that the government’s Pride in Place programme was an adequate replacement for the UK SPF, warning that it is too ‘small in scope and funding level’.
- All but one area said they will be unable to continue local business support services without adequate replacement funding. These programmes—often supporting small or start-up firms—include grants, training, and workshops.
- With much of this business support dependent on revenue rather than one off capital funding, eight in ten areas said the ending of the UK SPF would have a significant impact on job creation and business support.
- Several areas say they are beginning to shut down growth hub programmes, with some already beginning to make redundancies. Four in ten respondents say their job losses could reach up to 50 people in their areas, with one even saying that it could be over 200.
- Seven in ten councils say they will no longer be able to fund employment support programmes and upskilling —at a time when economic inactivity continues to rise nationally.
- Seven in ten respondents said they would no longer able to fund high street improvements and community projects, and six in ten said it would impact on tourism.
The CCN’s members provide over half of England’s jobs, businesses and GVA. The CCN warns that overlooking them will hold back national productivity if growth funds are channelled towards towns and cities, and areas governed by mayors, with the Pride in Place programme targeted very specifically at neighbourhoods.
Compounding this, councils also warn that reforms to local government finance through the Fair Funding Review 2.0 will redistribute annual core funding away from county regions to urban areas — further undermining their ability to support economic growth.
Councils say the shift risks creating a “lopsided system” that prioritises urban areas at the expense of rural and county communities and therefore fails to utilise the potential of all parts of England to support the government’s primary objective of growth.
With the government to set to reorganise councils in the coming years into unitary councils which ministers say will ‘drive economic growth’. But with councils no longer receiving UK SPF funds and areas missing out altogether, the CCN is concerned many new councils will come into existence without the means to fund business support and many other growth activities.
Cllr Steven Broadbent, Finance Spokesperson for the County Councils Network, said:
“The UK SPF has been a vital stream for councils in county areas over the last few years, helping thousands of businesses set up and then thrive, enabling people back into the workforce, and ensuring our residents have the skills to be the workforce of tomorrow. Such is the success of county growth hubs that some areas report waiting lists.
“County areas, including my own of Buckinghamshire, have significant and diverse economies. But for many of those areas, next March represents a cliff edge where that UK SPF money disappears and they will not receive anything from either the Local Growth Fund or Pride in Place programme. Even those that do receive Pride in Place funds are concerned it is no substitute for the UK SPF as it is very limited in scope.
“At a time when the government has made economic growth its key priority, it is concerning that the government’s actions suggest it believes growth can only happen in urban and city areas, creating a lopsided system of’ have and have nots’. On the contrary, counties are the backbone of the English economy and vital to its prosperity.
“By removing this funding stream to councils, including soon-to-be created unitaries, this will impact on county jobs and businesses. We urge a re-think from the Treasury and call on them to invest in all county areas in 2026.”
Cllr Rob Wilson, cabinet member for economic growth at Shropshire Council, added:
“It is hugely disappointing that, based on the announcements and detail provided to date, Shropshire will not receive any funds from either the government’s Pride in Place or Local Growth Fund, replacing UK SPF. This puts not only the authority, but our businesses and residents at a major disadvantage.
“Over the past four years, Shropshire has used approximately £20 million from the UK SPF to deliver around 60 projects including business advice, training, tourism, and cultural measures, that have benefited communities across the county. These projects will end in March, and without new funding, many cannot continue.
“Shropshire, as a rural area, already receives less funding per person compared to other more urban places, and focusing the new fund on cities will make this inequality worse.”
“After years of underfunding by successive governments, the new government needs to recognise that growth is needed outside of cities and future mayoral authorities. Local councils like Shropshire have shown that they can deliver when funded.”
Cllr Simon Clist, Cabinet Member with responsibility for the economy at Devon County Council, said:
“Devon has used the UK SPF to support thousands of local businesses, help residents back into work, and build the foundations for growth in our rural and coastal communities.
“The end of this fund, with no replacement for large counties like ours, creates a cliff edge at precisely the moment when economic inclusion and business resilience need greater support, not less.
“Without a viable successor to the SPF, we face the loss of proven programmes that help small firms innovate, sustain jobs and create new opportunities for local people. Rural counties, like ours, contribute significantly to national productivity, yet this funding shift risks leaving places like Devon without the tools to deliver the growth that government rightly expects of us.
“We are urging ministers to reconsider the distribution of future growth funding so all parts of the country can contribute to economic renewal. Devon stands ready to play its full role, but we need the means to do so.”
Cllr James Petter, Deputy Leader and Cabinet Member for Local Economy, Culture and Leisure at West Northamptonshire Council, said:
“With the UK SPF coming to an end, areas like West Northamptonshire face a significant challenge. The fund has played a vital role in supporting local businesses, helping residents gain new skills, and enabling people to move into employment, among many other benefits.
“At a time when economic growth is a national priority, it is concerning that county areas currently have no equivalent replacement funding. Without a clear route forward, valuable business support and economic development activity may be difficult to sustain.
“Despite this, we remain committed to investing in the future of West Northants. Through ongoing regeneration, town centre improvements and long-term plans to attract investment, we will continue working to create opportunities for our communities and businesses, and hope government will consider how all areas can be fully supported to contribute to national growth.”