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Local Authority Business Growth Incentives Scheme

Volume 470: debated on Tuesday 8 January 2008

To ask the Secretary of State for Communities and Local Government what changes the Government have made to the Local Authority Business Growth Incentives Scheme since its introduction; and what further changes her Department is planning. (176201)

The Local Authority Business Growth Incentives Scheme was announced in the 2002 pre-Budget report and introduced in 2005-06, to reward local authorities for increasing their business rateable value base. The scheme was simplified in its second year by removing the ceiling on payments to local authorities.

A further change was made during 2007, in response to a challenge to the scheme under Judicial Review. As a result, additional year 1 and 2 payments were made to eligible local authorities in September 2007. These payments reflected increases in rateable value attributable to business expansion.

Following further consideration of the new legal challenges that have been made against the current Local Authority Business Growth Incentives Scheme and the inherent uncertainty that this causes to the remaining LABGI pot, the Government are today drawing local authorities’ attention to their intention to re-consider all aspects of the approach used to distribute the remaining resources available for year 3 of the LABGI Scheme.

It should also be noted that the sum total of remaining LABGI resources available for distribution will be dependent on the amounts that may be required to meet any potential consequences arising from the court’s decisions on the legal challenges for years 1 and 2 of the LABGI Scheme.

A further announcement will be made shortly.