News & views
£5.34 million for Leicester, Leicestershire and Rutland: a first step towards devolution, but what comes next?
12 November 2026
As the region moves towards a Mayoral Strategic Authority, a new Government funding announcement raises important questions about investment priorities, economic growth and the role of business in shaping our future.
The Government has announced an indicative £5.34 million capital allocation for Leicester, Leicestershire and Rutland in 2027/28, through its new Good Growth Funds programme.
This is a welcome indication of progress towards devolution, but it also highlights the distance our region still has to travel.
By comparison, the established East Midlands Mayoral Combined County Authority, covering Derby, Derbyshire, Nottingham and Nottinghamshire, has been allocated £26.97 million under the same programme.
The difference is significant, although the figures are not directly comparable. The Government has deliberately applied different funding rates to established mayoral authorities and areas still progressing towards devolution.
Nevertheless, it illustrates a wider issue: while our neighbours already have devolved powers, established investment mechanisms and greater local control over economic priorities, Leicester, Leicestershire and Rutland are still developing the structures that will allow us to benefit from similar arrangements.
£5.34 million – where should it go?
The allocation is intended to support capital investment in economic growth as the region progresses towards devolution.
At present, there is no published indication of which projects might benefit, how priorities will be determined or precisely how the funding will be administered.
For a region with such a substantial and diverse economy, £5.34 million is a relatively modest sum.
That makes the choices about how it is invested particularly important.
Leicester, Leicestershire and Rutland possess some outstanding economic assets, including:
- MIRA Technology Park, with its strengths in automotive engineering, mobility and advanced technologies.
- Loughborough University and LUSEP, supporting research commercialisation, innovation and business growth.
- Charnwood Campus, an established centre for life sciences and pharmaceutical innovation.
- Space City Leicester, building on the region’s strengths in space technology and downstream applications.
- A substantial and diverse SME community, spanning manufacturing, logistics, professional services, creative industries and emerging technologies.
These are examples of the region’s economic potential, not confirmed destinations for the funding.
The challenge is to identify where relatively limited public capital can deliver the greatest additional economic benefit.
Could it unlock new private investment? Address gaps in innovation infrastructure? Support the commercialisation of research? Enable businesses to expand, improve productivity and create skilled employment?
There may be a stronger economic case for concentrating investment on a small number of carefully selected strategic projects rather than distributing it thinly across the geography.
Whatever approach is adopted, the decisions should be supported by clear evidence of business demand, economic impact and value for money.
Devolution must be about economic outcomes, not simply structures
Much of the public debate around devolution has understandably focused on governance, local government reorganisation and the creation of a Mayoral Strategic Authority.
These are important questions, but for businesses the real test will be what devolution actually delivers.
Will it improve access to skills and training? Accelerate infrastructure investment? Strengthen the region’s ability to attract investment? Help businesses adopt new technologies and improve productivity?
And will it enable Leicester, Leicestershire and Rutland to compete and collaborate more effectively with neighbouring economies?
The proposed mayoral arrangements offer an opportunity to develop a more coherent, long-term approach to economic development, connecting our universities, businesses, innovation assets and communities.
However, the transition will require clear priorities, effective governance and meaningful engagement with the private sector.
Business must have a voice
Businesses are not simply beneficiaries of economic development policies. They are the organisations making investment decisions, creating employment, developing technologies and driving productivity.
Their knowledge and experience should therefore help inform the region’s emerging investment priorities.
An important early question is whether work is already underway to establish a pipeline of capital projects capable of benefiting from the new funding.
Equally important is understanding how those projects will be assessed and how business representatives will contribute to the process.
The £5.34 million allocation may be relatively modest, but it offers an early opportunity to demonstrate how future devolved investment decisions could be made.
Looking beyond the initial allocation
The Government has also indicated that Leicester, Leicestershire and Rutland could benefit from a longer-term, 30-year mayoral investment fund, although the precise allocation has yet to be confirmed.
That longer-term prospect is potentially much more significant than the immediate capital announcement.
It creates an opportunity to consider the region’s economic ambitions over decades rather than individual funding cycles.
But it also makes the decisions taken now important.
The question is not simply how we spend £5.34 million. It is how we begin building an investment strategy capable of transforming the region’s economic performance over the next 30 years.
The funding announcement is a welcome step forward. The next challenge is ensuring that business, universities, local authorities and other partners work together to turn the opportunity into measurable economic growth.
Source: Department for Housing, Communities and Local Government, Good Growth Funds: Place Selection and Indicative Allocations, published 28 October 2026.
