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Producing high-fidelity real-time simulations of neutron diffusion in a reactor is computationally extremely challenging, due, in part, to multiscale behaviour in energy and space. In many scientific fields, including nuclear modelling, the application of reduced-order modelling can lead to much faster computation times without much loss of accuracy, paving the way for real-time simulation as well as multi-query problems such as uncertainty quantification and data assimilation. This paper compares two reduced-order models that are applied to model the movement of control rods in a fuel assembly for a given temperature profile. The first is a standard approach using proper orthogonal decomposition (POD) to generate global basis functions, and the second, a new method, uses POD but produces global basis functions that are local in the parameter space (associated with the control-rod height). To approximate the eigenvalue problem in reduced space, a novel, nonlinear interpolation is proposed for modelling dependence on the control-rod height. This is seen to improve the accuracy in the predictions of both methods for unseen parameter values by two orders of magnitude for <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msup><mi>k</mi><mi>eff</mi></msup></semantics></math></inline-formula> and by one order of magnitude for the scalar flux.