Stormont ministers have outlined how a £39m Local Growth Fund (LGF) will be distributed across Northern Ireland, confirming that almost £12m will go towards day-to-day spending and £27.4m will be directed into infrastructure and capital projects. The fund, introduced by the UK government to replace money that previously came from the European Union, has proved controversial after ministers shifted its focus away from supporting the daily running costs of voluntary organisations and towards physical infrastructure schemes.
The Northern Ireland Council for Voluntary Action (Nicva) has warned that this change in emphasis is already resulting in significant job losses across the voluntary and community sector, as groups lose the resource funding that previously covered staffing and core services.
How is the £27.4m infrastructure funding being divided?
The £27.4m capital allocation is being channelled through several Stormont departments, with the Department for the Economy receiving the largest share at £13m. Economy Minister Caoimhe Archibald said the money would support projects focused on innovation, business start-ups and social enterprises.
Within that allocation, £7.1m has been earmarked for Invest NI, which will use the funds to help businesses with innovation projects and to carry out early-stage design work on its Mandeville industrial estate in Craigavon. The Department for Communities will receive £7m for initiatives including town centre renewal and the regeneration of vacant properties. A further £3.8m has gone to the Department of Agriculture to support innovation and sustainability within the farming sector, while the Department for Infrastructure will receive £3.2m to invest in transport and connectivity improvements.
What have ministers said about the fund's rollout?
Finance Minister John O'Dowd said the funding would produce measurable results despite his criticism of how the process had been managed by the UK government.
He said the money would deliver "tangible benefits" but that "the entire handling by the British government on this fund put us in a position which was far from ideal".
O'Dowd added that he intends to keep pressing for future funding decisions to rest with locally accountable ministers rather than officials in London.
He said he would continue to argue that in future "priorities should be determined by locally elected ministers, not Westminster".
Why are some voluntary groups concerned?
East Londonderry assembly member Claire Sugden welcomed the capital investment but said it does not compensate for the loss of resource funding that community organisations have relied on.
"Resource funding pays the staff who support vulnerable people, run employability programmes, tackle isolation and help families through difficult circumstances," she said.
"Without it, services may be reduced, experienced staff could be lost and people will have fewer places to turn for help."
How does this fit into Stormont's wider economic funding picture?
The Local Growth Fund is one of several economic interventions Stormont has pursued in recent months. Earlier this year, the Executive committed £16m to a separate scheme aimed at tackling economic inactivity, appointing Alan Milburn to lead a commission focused on helping people affected by sickness or disability return to work, as detailed in our earlier coverage of that initiative. According to a national broadcaster's report, the debate over the Local Growth Fund reflects a broader pattern in which EU replacement money has increasingly been steered into UK-controlled schemes, a shift that Nicva argues has directly contributed to redundancies across the voluntary sector, as noted in a national broadcaster's earlier report.
Separately, according to a national broadcaster's coverage of the 2026 Budget, the UK government has set out a wider £1.5bn funding package for Stormont covering the next financial year, comprising £1.2bn for day-to-day spending and £270m for infrastructure — figures that sit alongside, but are distinct from, the £39m Local Growth Fund.
What happens next?
The Executive is understood to be preparing to announce how a further £100m in transformation funding will be spent, with departmental spending plans expected to extend through 2029, according to a regional broadcaster's report. Voluntary sector groups are likely to continue pressing ministers for clarity on whether any of that additional funding could offset the resource-spending shortfall created by the Local Growth Fund's shift towards capital projects.
- The £39m Local Growth Fund replaces previous EU funding streams for Northern Ireland.
- £11.6m is allocated to day-to-day resource spending and £27.4m to infrastructure projects.
- The Department for the Economy receives the largest single allocation, at £13m.
- Nicva says the shift towards capital spending is driving redundancies in the voluntary sector.
- A further £100m in transformation funding is expected to be announced, with spending plans running to 2029.
