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Local Government Finance

Volume 459: debated on Friday 20 April 2007

To ask the Secretary of State for Communities and Local Government when she expects to make available to local authorities that part of this year’s local authority Business Growth Initiative awards which has been withheld; and what assessment she has made of the impact on local authority budgets of the withholding of those awards. (132747)

As we have previously announced, in the three years to 2007-08 local authorities will receive up to £l billion through the Local Authority Business Growth Initiative. We have abolished the ceiling but due to judicial reviews brought by Corby and Slough borough councils, this year payments have been scaled back to 70 per cent. of their value to protect the important incentive this scheme creates for authorities both in this year and next year. Authorities received £316 million this year which is more than two and a half times the £126 million of grant paid last year and 50 more authorities received LABGI grant this year than last.

There is therefore a detrimental effect on local authorities due to the action of Slough and Corby councils. I have made no assessment of this impact.