HISTORIC PRESS RELEASE : New measures enabling local authorities to create jobs, support business and promote enterprise [November 2003]

The press release issued by HM Treasury on 17 November 2003.

New measures enabling local authorities to promote economic development, create jobs and support business were set out by the Treasury today.

Economic Secretary to the Treasury John Healey and Chief Economic Adviser Ed Balls set out the new measures designed to extend the role of local government in economic development and give local authorities greater incentives to promote enterprise at the opening of the Local Government Associations’ 2003 Annual Economic Regeneration Conference in Manchester.

Following an overwhelmingly positive response to an earlier consultation, John Healey and Ed Balls said that the Treasury will be announcing plans to proceed with the Local Authority Business Growth scheme in the Pre-Budget Report on 10 December with a view to publishing the full details in Budget 2004 and introducing the scheme in 2005.

The scheme, which could mean an additional £1 billion for local authorities across the country, including a possible £130m for the North West alone, will allow local authorities to retain a proportion of the growth in business rate income to spend on local priorities.  By giving local authorities a direct financial incentive in business creation the aim is to encourage them to work more closely with businesses and other partners, including the Regional Development Agencies, to boost business growth.

Speaking at the Local Government Association’s annual conference on economic regeneration John Healey said:

“Local authorities have a crucial role to play in our society, acting as community leaders, delivering services, and working with partners to promote economic development at the local level.  The Government is committed to doing more to give local authorities the resources and freedoms they need to tackle barriers to enterprise, employment and growth.  Here in Manchester, the City Council has shown the way, successfully reversing population decline in the city centre and strengthening the economic and social fabric of the city.  The Local Authority Business Growth scheme will ensure that in the future success in this role is recognised and rewarded. ”

Ed Balls added:

“Local authorities across the country stand to gain up to £1bn from Local Authority Growth Incentives which will provide a powerful incentive for authorities to promote local enterprise and growth. Councils here in the North West alone could gain £130 million, and Manchester itself could get an extra £25 million over three years. The response to the consultation has been excellent and has shown that both local authorities and businesses would welcome the additional resources and the freedom to spend them on local priorities. Here in Manchester, the Local Authority Business Growth scheme could mean an additional £25m over three years.”

A new Government prospectus on Enterprise Areas – the 2,000 most deprived areas in the UK – was also published today.  The prospectus highlights the toolkit of policy measures available to promote regeneration in the UK’s most deprived 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.