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Faced with significant disparities in economic performance between its different regions, the UK is set to launch a series of Local Growth Plans (LGPs) aimed at closing these gaps. These roadmaps will use what are called Place-Based Business Cases (PBBCs) as a compass to find the way towards growth opportunities, according to a report from consultancy BearingPoint.
Starting in 2026, these plans will provide a way for local and national leaders to work together on investments that create long-term growth. Regional leaders, as part of what are called Mayoral Strategic Authorities, will lead this work, using a method called Place-Based Business Cases to decide which projects should receive funding.
This new approach brings together different areas like housing, transport, health, and education instead of looking at them as separate issues. By linking these sectors, officials hope to create a more powerful impact on local communities.
For example, Greater Manchester is focusing on five global industry groups and has set up a $1 billion Good Growth Fund to support them. This plan includes a £400 million investment to build nearly 3,000 new homes and create more than 22,000 jobs.
“Effective place-based investment requires tailored growth strategies that address the unique needs and opportunities of each locality,” according to the BearingPoint report. “This means moving from delivering loosely co-ordinated projects to establishing integrated, holistic portfolios that consider how various housing, transport, education, health infrastructures, and employers interact within a community to deliver cumulative impacts.”
Value and impact of projects
A major part of this change is how the government decides if a project is worth the cost. New 2026 guidelines require leaders to look at more than just financial returns. They must now consider ‘social value’, which includes things that are hard to put a price on, such as community well-being, civic pride, and environmental benefits like biodiversity.
This means business cases must be based on evidence and the specific needs of a local area. Projects that have stalled will be reviewed, and if they do not provide enough value under these new rules, they may be stopped. This ensures that public money is spent on the most effective programs.
In London, the goal is to grow the economy by £107 billion by 2035 and create 150,000 good jobs by 2028 through specialised innovation zones. The end goal is to restore productivity growth to 2% per year by 2035.
Building skills for the future
While these plans are ambitious, local authorities face a shortage of the expertise needed to carry them out. In particular, there is currently a lack of economists, data analysts, and skilled business case authors with experience of working at scale.
“To support the ambitions of Place-Based Business Cases, there is growing recognition across the government of the need to strengthen local capacity and capability,” the report notes. “Addressing the skills shortage is vital. Building expertise will not only enhance the robustness of business case development but also empower local authorities to respond nimbly to changing economic realities.”
Successful regional funding depends on customised plans that target the specific strengths and gaps of each locality. Instead of managing isolated tasks, leaders need to create unified strategies that link schools, clinics, transit, and housing to generate a collective benefit for the area.
Some regions are also moving forward with their own unique goals. For example, the West of England aims for 15% growth in its main industries and plans to create 72,000 new jobs. It will also set up an AI supercluster to drive technology forward. Meanwhile, the North East is working to become a leader in low-carbon energy, with plans that could bring in $30 billion in investment.
Community voices will be a vital part of every step. Leaders must work with residents and local businesses to make sure projects have support from the people who live there. By listening to the community and using clear data, the government aims to create growth that lasts for many years.
“The next phase of local growth planning demands bold vision, inclusive engagement, and a steadfast commitment to evidence-led decision making. This requires strong partnerships between public authorities and private enterprises, creating a dynamic environment where shared ambitions can flourish,” the report summarises.
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