Unless something has changed recently, routines do not run locally. 
The only things that run locally are the official smartlighting feature (and then only if all of the devices referenced use device type handlers which are eligible to run locally) and some parts of smart home monitor.
And you can’t change the mode locally – – that’s handled in the cloud.
So nothing that is based on either modes changing or on routines can handle your internet outage situation. SmartThings is primarily a cloud-based system.
There are a number of home automation systems which do have much more local processing or even run primarily locally (except for voice controls and IFTTT integration if available): HomeKit, Insteon, Vera, homeseer, indigo, etc. Even Philips Hue and Logitech Harmony run primarily locally.
But it’s just not true that SmartThings “has all the component parts” for similar operation: since its architecture places all the custom logic in the cloud, it’s not available without a cloud connection. But the company did address it at the same time that they addressed the battery back up for the hardware: by making the official smartlighting feature available to run locally. It doesn’t do a lot, but it will do lights and motion sensors if you’ve chosen the correct devices.
Choosing an Emergency Plan
If your main concern is motion sensor lighting, there are several ways to give yourself a backup system that will work even when SmartThings fails.
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use Z wave direct association Between Z wave motion sensors and contact sensors and zwave switches and light bulbs. You need the smartthings hub operating to set this up, but once it’s set up it will work even if the cloud is not available. think of this as emergency lighting, so you might do only A few lights, but it will keep your stairwell lit as long as your power is on. The con for this is that it only works with Z wave and there’s no logic rules on it at all – – every time that sensor is triggered that light comes on, even if it’s the middle of the day. This is what people used to do, but there are better choices now.
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set up locally eligible smartlighting rules for your emergency situations. This allows you to mix some protocols, such as a zigbee sensor and a Z wave light switch and give you some logic filters. It’s nowhere near as sophisticated as webcore, but if you just want to sure that a light will come on at the top and bottom of the stairs, it can work quite well. You can also set up a minimote to leave on the nightstand instead of using sensors.
The main con is just that the rules engine isn’t as powerful as webcore. And it won’t run as many different devices. And it may take some planning to get rules that are still valid for non-emergency situation. But it’s a valuable tool for emergency planning, and it’s the one that is officially provided.
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Use HomeKit with Phillips hue lights and motion sensors working through the Hue bridge as your emergency system. HomeKit runs locally and while there isn’t a single overall mode, you can enable each individual automation pretty quickly. This is what we use at our house. (We also use Lutron Caseta light switches, but we are in the US. In the U.K., the 2nd generation LightwaveRF Wall switches work with HomeKit, but unfortunately don’t as yet work with SmartThings.)
The rules engine isn’t as powerful as web core, but it’s reliable and everything runs locally except voice processing, which will run over cellular.
Also unlike the first two options, you have the ability locally to enable/disable the individual HomeKit automations so you don’t have to worry about rule overlap during non-emergency situations. The Con is whether you have to buy additional devices to make this work. you might end up with duplicated motion sensors in some rooms, for example.
Because I myself am quadriparetic, my backup system needs to include voice control. If the Internet is still available, it’s just the SmartThings cloud that is glitchy, then I can still use echo with both Lutron Caseta and the Phillips hue bridge. If the Internet is out, I can use Siri on my Apple Watch with the same devices. But not everyone has a voice control requirement for their emergency plan.
The community – created wiki has a list of devices that work with both SmartThings and HomeKit. There aren’t a lot, but there are some.
http://thingsthataresmart.wiki/index.php?title=Devices_that_Work_with_HomeKit_and_SmartThings
So to summarize:
You won’t be able to do anything based on changing modes or routines: when you lose access to the SmartThings cloud, you lose those as well.
Most people will be able to set up emergency lighting with locally-eligible motion sensors and zwave switches using the official SmartLighting feature. It won’t have all the bells and whistles that WebCore provides, but it should keep you from having to navigate a dark stairwell. So with the right planning, this should be the “good enough” emergency solution for many people.
For others, particularly those who want to include voice control via cellular in their emergency plan, HomeKit with the Phillips hue bridge is worth considering, particularly if you already have some iOS devices. And any other devices that work with both SmartThings and HomeKit. Again, the logic will be much simpler than with webcore, but it’s a level higher than the local operation of SmartLighting as it can include Geofencing triggers. And it is pretty simple to enable/disable individual rules locally when you are shifting over to your emergency operations.
If you have frequent Internet outages, or you place a very high priority on your home automation working when the Internet isn’t available, then you may just need to consider a different system with more robust local operation.
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