Solihull to Urge a Fairer System for Rewarding Business Growth
From Cllr Ian Courts, Cabinet Member for Economic Development and Regeneration on 26 November 2007
Solihull’s Cabinet has considered the proposed changes to the Government scheme that rewards councils who have encouraged business growth in their area.
The Local Authority Business Growth Incentive Scheme (LABGI) gives financial rewards to councils that have promoted the greatest levels of continued economic growth in their local areas by allowing them to retain increases in revenue from business rates.
However, the scheme insists on a minimum rate of growth before councils get the financial reward. That rate of growth is based on the rate of growth between 1995 and 2003. This happened to include the period that Touchwood and Blythe Valley were developed giving an average growth of over 4%. Despite Solihull’s continued growth this level has not been able to be achieved since.
Recognising the limitations of the existing scheme the Government will be consulting on a new approach early in 2008. At this stage it is asking for responses to some key principles with a deadline of 12th December.
Cllr Ian Courts, Cabinet Member for Economic Development and Regeneration, said: "Last year we lost out and didn’t get any of the £316million that was awarded to local authorities for encouraging business growth. That was despite us seeing a growth in our overall rateable value of over £2million. Solihull is at the heart of the region’s business growth with the most productive economy of any local authority in the region, exceeding the UK average by 21%. The current formula in effect penalises us for having had a particularly good period between 1995 and 2003. Developing Touchwood and Blythe Valley was a once in a lifetime opportunity. What we need now is something that is equitable and predictable."
Notes to Editors
- The LABGI scheme was introduced in 2005/6
- In the first two years of the scheme around £440m of additional funding was awarded to local authorities
- Cabinet agreed that the Cabinet Members for Resources and Economic Development and Regeneration should approve the response to the key principles in December.
Julie Turner 0121 704 6136
Email: juturner@solihull.gov.uk