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Local Authority Business Growth Initiative (LABGI) reform – December 2007
LABGI is currently granted on the basis of business growth as measured by the increase in the rateable value of a local authority during a calendar year. In light of the fact that LABGI in its current form will end in the 2007-08 financial year, the Government is looking to reform LABGI and is seeking views on the options. Over the duration of Comprehensive Spending Review 2007, LABGI funding has been set at £150m over the three years.
Since the LABGI process was introduced, the Lyons Enquiry and the Sub-National Review have emphasised the role local government can play in economic growth. Therefore, in accepting the proposals from these two documents the Government has accepted that local authorities need flexibility and the ability to adapt to react quickly in the changing world.
The Government’s consultation paper did not propose a way forward, but sought views on reforming the scheme to deliver the objectives to;
- Empower local authorities to take a lead role in encouraging economic development.
- Strengthen the fairness of the incentive so that all authorities – particularly the most deprived – make a greater contribution to local economic well-being by sharpening the link between financial rewards and local growth.
- Support the plans local authorities make for the future of its local area by delivering greater certainty, simplicity and transparency in the value of LABGI.
- Deliver long-lasting reform by creating a permanent incentive to reward economic development that is fully integrated with the local government finance system.
In consultation with its members, the Association has responded to this document.
