| Published | 29 August 2008 |
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Local Government Minister John Healey has today proposed new plans for a £150m scheme to encourage councils to work together to boost local jobs, skills and economic growth.
Over the past three years, the Local Authority Business Growth Incentives (LABGI) scheme has rewarded well over 350 councils for business growth in their local area.
Proposals for the reformed scheme, on which John Healey is consulting, would greatly simplify LABGI. They also recognise that councils working together can often achieve more than if they worked alone.
Under the plans, councils would qualify for reward funding depending on the extent to which they and other authorities in their sub-region increased the business rates base. This would be judged through a rolling three-year assessment period.
Grant funding allocated to a sub-region would then be distributed to each council area according to the size of its population.
These changes would reinforce plans to give councils a greater role in improving economic growth, by conducting an assessment of the economic challenges in their local area, and working with the Regional Development Agency, businesses and other local organisations on a regional strategy to tackle them. The regional strategy would integrate issues including housing, planning, skills, employment and transport.
Councils are being invited to submit their views on all aspects of the proposed reward scheme and, in particular, how the sub-regions should be formed to best reflect the economic challenges in their communities.
The Government plans for the new scheme to start in 2009-10, with £150m available over two years. The details of the scheme will be finalised in the light of the consultation.
Local Government Minister John Healey said:
"Councils can and should play a greater role in boosting the economic prospects of their local areas; they know the challenges their communities face, and how best to deal with them.
"The initial LABGI scheme recognised the role of individual councils in supporting local business growth. But councils working closer together can achieve more for local people and businesses.
"So I want an incentive scheme that goes further, encouraging and rewarding greater collaboration between councils and better reflects the local economy, which rarely fits with local authority boundaries."
1. Reforming the Local Authority Business Growth Incentive Scheme: A consultation paper is published today and can be found at: www.communities.gov.uk/publications/localgovernment/reforminglabgiconsultation.
2. The Sub-National Review of Economic Development and Regeneration was published on 17 July, 2007. Details can be found at: www.communities.gov.uk/news/corporate/spread_opportunity_to_all.
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