Allister Hayman,
Regeneration & Renewal,
5 September 2008
A scheme that encourages town halls to boost local business growth will in future be based on the performance of city- regions, not council areas, under proposals announced by local government minister John Healey last week.
The Local Authority Business Growth Incentive (Labgi) scheme, under which councils that promote economic growth are allowed to retain a share of rises in business rates revenue, will be based on "real economic areas", with local authorities grouped together and awarded cash based on the rise in business rates across their sub-region.
The existing Labgi funding pot was worth £1 billion from 2005-08, but was often criticised for being unfair and overly complex. It awards funding using complicated measures such as the rise in the rateable values of properties and is based on the performance of individual councils. But Healey said the new scheme, which is worth £150 million in total between 2009/10 and 2010/11, would aim to encourage greater collaboration between councils in supporting local business growth.
He said: "I want a scheme (that) better reflects the local economy, which rarely fits with local authority boundaries."
- Reforming the Local Authority Business Growth Incentives Scheme is available via www.regen.net/doc.
