HISTORIC PRESS RELEASE : Government´s £1 billion boost for local government [July 2003]

The press release issued by HM Treasury on 4 July 2003.

A £1 billion boost for local government, backing enterprise for the regions, was launched today, as John Prescott and Gordon Brown launched a consultation paper on the new Local Authority Business Growth Scheme at the Local Government Association Conference in Harrogate.

The scheme, which will reward local authorities for encouraging business in their area, will allow councils to retain money from business rates where there is increased economic growth in their area.  It should start in April 2005.

The Deputy Prime Minister said:

“This scheme should give councils a real incentive to work together with business to create enterprising and thriving communities.  We want to create a win-win situation where flourishing businesses will benefit everyone in the community.”

The Chancellor said:

“For the first time, all of us in partnership can each secure financial benefits from creating new businesses. Based on historical data, we estimate that, as a result of this measure, local authorities could gain up to £1 billion over the next three years – showing that the next stage of our employment and growth strategy for Britain can only succeed with greater initiative and engagement by local areas. Further reforms in the Pre-Budget Report will reflect this.”

Responses to the Consultation Paper are invited by the end of October.