Since entering office in 2010, a distinct grammar of localism has pervaded the UK Government’s philosophical outlook, which has inflected localist policy discourses and practice. Now that the Coalition administration’s ‘local’ economic development policy is becoming a little clearer, it is timely to consider the implications of this new grammar for the scope, organisation and mobilisation of economic development interventions. The purpose of this paper, therefore, is to trace new and emergent directions in economic development through a focus on the 2011 Localism Act, which applies to England and Wales. The paper interprets these changes through a localist conceptual prism, which helps to refract different varieties of localism. The findings raise some serious concerns regarding localism in action and expose the controlling tendencies of central government. Analysis is also directed towards the uneasy relationship between centralised powers, conditional decentralisation and fragmented localism. Nevertheless, some cases of emergent practice are utilised to demonstrate how ‘constrained freedoms’ can be negotiated to undertake innovative actions. The paper concludes by suggesting some foundational elements that would support the notion of ‘empowered localities’ and may also secure the government’s imperative to enable private sector-led growth.