Scotland's local government body COSLA is calling for a fundamental reset in how councils are funded and empowered to drive economic growth, ahead of the 2026 Scottish Parliament election.
In a newly published economy white paper, COSLA argues that more than a decade of constrained, short-term and increasingly ring-fenced funding has eroded councils' capacity to plan for major economic transitions, despite rising demand and growing policy expectations.
The paper highlights the role local authorities already play in delivering employability services, business support, regeneration and fair work programmes, but warns that without stable and flexible funding, Scotland risks weaker growth and higher long-term costs to the public purse.
COSLA is urging the next Scottish Government to treat local economic development as a strategic investment rather than a funding afterthought.
COSLA's Environment and Economy Spokesperson, Cllr Gail Macgregor, commented: ‘Local Government is already delivering for Scotland’s economy, but it is doing so within a funding system that is increasingly precarious and fragmented.
‘This white paper makes a clear case for treating local economic development as a strategic investment.
‘With the right powers, flexibility and resources, councils can help build a more resilient, inclusive and sustainable economy for communities across Scotland.’
