The Treasury has set out a series of measures designed to enable local authorities to promote economic development, create jobs and support business. The package has been developed to give councils a bigger role in economic development and to offer them greater incentives to promote enterprise.They were announced by the Economic Secretary to the Treasury, John Healey, and Chief Economic Adviser Ed Balls at the opening of the Local Government Association’s Economic Regeneration Conference in Manchester. They said that following a positive response to an earlier consultation, it was now planned to proceed with the Local Authority Business Growth scheme in the Pre-Budget Report on December 10th with a view to publishing the full details in next year’s Budget 2004 and introducing the scheme in 2005.
The scheme will allow local authorities to retain a proportion of the growth in business rate income to spend on local priorities and that could mean an additional billion pounds for councils across the country, including a possible 150 million for the West Midlands alone. The aim is to encourage authorities to work more closely with businesses and other partners, including the Regional Development Agencies, to boost business growth, by giving them a direct financial incentive in business creation
A new Government prospectus on Enterprise Areas – the 2,000 most deprived parts of the UK – has also just been published. It highlights the toolkit of policy measures available to promote regeneration in the country’s hardest hit communities, including stamp duty exemptions on local property transactions and Community Investment Tax Relief to improve access to small business finance. The Government is asking for feedback from those communities on how this toolkit can be further developed.
The Pre-Budget Report will also consider what more can be done to promote enterprise in these areas, including measures aimed at streamlining the planning process and encouraging the release of derelict land for the creation of new businesses.
John Healey told the conference that councils had a crucial role to play in acting as community leaders, delivering services and working with partners to promote economic development at the local level and the government was committed to giving them more resources and the freedoms they needed to tackle barriers to enterprise, employment and growth.
Based on historical data, and depending on the exact form the Business Growth scheme takes, it is estimated that it could see up to an extra 150 million pounds being made available to councils in London and 130 million for authorities in the North West. English authorities in total could benefit by up to 935 million pounds with a further 65 million being diverted to councils in Wales.