Local Authority Business Growth Incentives

Rochdale will be one of over 250 local authorities in England awarded under an incentive scheme aimed at encouraging business growth in 2005/06, Local Government Minister Phil Woolas has announced.  Including this initial award, the Local Authority Business Growth Incentives (LABGI) scheme will see funding to local authorities increase to almost £1 billion over the next three years, to 2007/08.

Currently revenue from business rates received by local authorities is paid to central government, and then redistributed to local authorities on the basis of population. LABGI provides an incentive for local authorities to promote economic growth in their area by allowing them to be rewarded for an increase in rateable value, above
a certain level.

It is for local authorities to decide how their reward is spent - whether to provide even better public services for their communities, invest in further business growth or to reduce council tax increases.

Minister for Local Government, Phil Woolas, said:

"I am delighted to announce the grant payments for the first year of this scheme, which provides substantial rewards for local authorities. Government is committed to devolving powers and to encouraging new business.  This grant is a huge boost to both goals."

John Healey, Financial Secretary to the Treasury, added:

"LABGI underlines the Government's commitment to generating greater economic growth and raising productivity at the local level.  Every Local Authority now has a direct financial incentive to promote enterprise, employment and the growth of small and medium sized businesses in the local community and the freedom to influence local
outcomes".

Details of the grant payments to individual authorities, and of the LABGI scheme, can be found on the ODPM website at: http://www.local.odpm.gov.uk/finance/labgi.htm