Warning that business support in local areas could shut down due to government funding shake-up

Councils across the UK face a “cliff edge” for economic growth funding next year which could impact their their ability to support small businesses.

The warning from County Councils Network (CCN) comes ahead of the ending of the government’s UK Shared Prosperity Fund (UK SPF) from April 2026.

The fund has provided £900 million for England’s unitary local authorities, county councils, and district councils since 2022, but it will be replaced next year with the new Local Growth Fund in areas with established mayors and the neighbourhood-level Pride in Place programme.

However, CCN said several areas, including Buckinghamshire, Shropshire, West Northamptonshire and Devon, will receive nothing from the new funds. One local authority said this 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, so the vast majority will not receive any of the new Local Growth Fund. The government has announced that elections for mayors in several county areas have been postponed until 2028.

The Pride in Place programme is 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 CCN said Pride in Place was an adequate replacement for UK SPF.

In other findings from the survey, all but one area said they will be unable to continue local business support services without adequate replacement funding, with eight in 10 warning the ending of the UK SPF would have a significant impact on job creation and business support.

Several areas reported they have started to shut down growth hub programmes, with some making redundancies. Four in 10 respondents said job losses could reach up to 50 people in their areas, with one saying that it could be over 200.

Seven in 10 councils said they will no longer be able to fund employment support programmes and upskilling, and the same proportion said the same about high street improvements and community projects. Six in 10 said it would impact on tourism.

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.”