John Denham: £50 million to help councils with economic recovery

Published       15 March 2010  
An extra £50m is being given to councils to help them make big strides toward economic recovery in their local area, announced Communities Secretary John Denham today.

The funding is being allocated to all areas of the country from the Local Authority Business Growth Incentives (LABGI) scheme that rewards councils which successfully promote local growth.

John Denham is clear that vital public sector support at this time can lessen the impact for struggling families and businesses. He wants to see councils use this grant to help small and new businesses in hard hit areas who often need extra support to get through the tougher times so they can hit the ground running as economic growth picks up.

Among the recipients North East Lincolnshire Council will get over £160,000 more. Already they have used it to help small businesses and local employers in Grimsby bounce back from the recession with business and renovation grants and a bus service to reach the local business park.

Bristol will get over £400,000 and has already used £1m to create an apprenticeship scheme with the university, deliver Real Help Now Government schemes and a jobs bus. LABGI has helped new businesses through the Yeovil Information Centre which provides affordable office space. In Aylesbury Vale it funded free parking to encourage shoppers to support local business.

Last July the scheme was re-launched with a similar £50m grant. Today's announcement builds on that and takes the total LABGI funding since 2005 over £1bn, on top of normal Government grants.

Government action through Real Help Now has supported many families and businesses. It is also is also giving wider support including free business health checks, discounted rate bills for small businesses, tax payment deferrals, capital loans or help with bank loans for business growth, and a 10-day Government payment promise.

Mr. Denham said:

"Building economic recovery is the Government's top priority and we firmly believe in the decisive leadership role councils have to play. Strong, vibrant, decisive local government is an essential part of our plans to promote growth and cut unemployment while rebuilding the public finances.

We put the public sector in the lead while the private sector was struggling, spending and investing to lessen the impact on individuals, businesses and communities. We are giving councils up and down the country a further £50m to support small and new businesses in hard hit areas that might need a little jump start to get up and running again.

Local councils, and councillors, with their unique democratic mandate, are best placed to make to provide financial support and local services that are responsive to the pressures being felt by families and businesses in local areas.

Through our Real Help Now plan we have committed a billion pounds to create more than 150,000 jobs and guaranteed everyone under the age of 25 a job, training or work experience if they are out of work for over six months and given struggling small businesses financial support through our billion pound Enterprise Finance Guarantee and tax payment deferrals."

Notes to editors
1. The Local Authority Business Growth Incentives (LABGI) scheme rewards councils in England which achieve business growth in their area with a government grant to spend on local priorities. Today's announcement confirms that all authorities will receive LABGI in 2010-11. LABGI grants are not ring-fenced.

2. Since 2005-06 over 350 councils have already shared £980m. No funding was allocated for the 2008-09 financial year, while the Government worked through a consultation on simplifying the scheme. The reform shape of the scheme was announced July 2009 and, in September, £50m was distributed to qualifying authorities (almost all of them).

3. LABGI measures business growth through the business rates delivered by each sub-region on a rolling three-year basis. Local authorities and other interested stakeholders are invited to comment on provisional allocations by or on Monday 29 March 2010.There are no changes in the underlying methodology by which rewards are calculated. Grants are calculated for 55 sub-regions, and then distributed to local authorities according to population size. In two-tier areas rewards are split equally between district and county councils.

LABGI reward for 2010/11*
Sub-Region      Sub-region reward      
Bedfordshire and Luton  £664,322       
Berkshire       £777,316       
Black Country   £1,395,278     
Blackpool, Fylde and Wyre       £225,378       
Bournemouth, Dorset and Poole   £650,272       
Buckinghamshire and Milton Keynes       £850,505       
Cheshire        £1,197,462     
Cornwall and Isles of Scilly    £371,880       
Coventry, Solihull and Warwickshire     £1,029,276     
Cumbria £403,866       
Derbyshire      £723,196       
Devon   £843,291       
Durham County   £317,370       
East Kent       £352,199       
East Sussex     £513,333       
Gloucestershire £626,290       
Greater Cambridgeshire  £661,772       
Greater Manchester      £2,706,829     
Heart of Essex  £603,690       
South-West Essex        £319,617       
Herefordshire   £90,751
Hertfordshire   £1,386,687     
Hull and East Riding of Yorkshire       £384,610       
Inland Kent     £652,903       
Lancashire      £541,302       
Leicestershire  £822,106       
Lincolnshire and Peterborough   £653,285       
London  £12,374,010    
Merseyside      £1,136,443     
Norfolk £632,833       
North Kent      £559,571       
North and North-East Lincolnshire       £324,362       
North Yorkshire £555,844       
Northamptonshire        £579,938       
Northern Hampshire with Surrey Heath    £596,353       
Northumberland  £161,292       
Nottinghamshire £659,428       
Oxfordshire     £657,838       
Shropshire and Telford  £254,011       
Somerset        £232,907       
South Yorkshire £1,076,207     
South Staffordshire     £463,391       
North Staffordshire     £280,311       
Suffolk £591,443       
Surrey  £1,067,137     
Tees Valley     £332,170       
Thames Gateway South Essex      £689,468       
Tyne and Wear   £1,017,110     
Urban South Hampshire   £1,229,252     
Isle of Wight   £79,238
West of England £1,095,290     
West Sussex     £736,993       
West Yorkshire  £1,792,680     
Wiltshire with Swindon  £647,694       
Worcestershire  £411,998       
Total grant to English local authorities:       £50,000,000    


*This table is for information only. Awards are made to individual Local Authorities.
4. The individual allocations to all 353 individual councils can be found at:
www.communities.gov.uk/localgovernment/localgovernmentfinance/labgi/labgischeme2/.