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- Response to the outcome of the Judicial Review proceedings brought against the Department by Corby and Slough Borough Councils
Response to the outcome of the Judicial Review proceedings brought against the Department by Corby and Slough Borough Councils
Although this decision is disappointing, it in no way reflects on the success of the scheme which councils have welcomed as a useful incentive to boosting business growth within their communities.
This decision relates to the way in which Local Authority Business Growth Incentives Scheme (LABGI) is administered and we are determined to move quickly to remove uncertainty for local authorities about what it means. We will also ensure that no authority receives a reduction of earlier payments as a result of this decision.
We will therefore make additional payments to eligible authorities for years one and two which will reflect increases in rateable value attributable to business expansion. This methodology will also be carried forward into the third year of the scheme.
We have also decided not to include any decreases in rateable value caused by contractions of existing businesses and we will not alter starting rateable values.
We are working on reforms to LABGI to ensure there is a clearer focus and stronger incentive for authorities to support business growth and we will be consulting on proposals shortly.
Background
The Government introduced the LABGI in April 2005. The scheme awards local authorities with a proportion of increases in local business rate revenues to spend on their own priorities, creating a direct financial incentive for authorities to promote local business growth. Corby and Slough Borough Councils mounted a legal challenge to the Government's decision in year one of the scheme to exclude the changes in rateable value recorded under VOA "change code 20". On Tuesday 31 July 2007 the court found in favour of Corby and Slough Borough Councils. The statement above announces how the Government will give effect to this ruling.
