Press Release
FSB urges government to maintain business growth scheme
The Federation of Small businesses (FSB) has urged ministers to maintain and improve a successful scheme that rewards local authorities for supporting entrepreneurs.
The UK’s biggest business organisation said that the government should recognise the success of the Local Authority Business Growth Incentive (LABGI) scheme by extending its life span.
Under the LABGI scheme, local authorities have received around £300 million per year for three years as a reward for successfully promoting economic growth in their areas.
They can use that money as they see fit. Now the plan is to bring in a new scheme that would see local authorities receive only about £100 million per year.
The FSB believes this is inadequate. The original scheme has been a success and should be extended, but the money should be ring-fenced to support local businesses.
Roger Culcheth, FSB local government chairman, said, "The LABGI scheme has been a great success and should be extended in its present form. It has encouraged councils to work harder to support economic and business development in local areas.
"But the money it raises must not get lost in council finances. It should be ring-fenced to support the success of local businesses in the future.
"Given the economic hardships that many are facing at the moment, a less generous scheme to support local businesses is exactly the wrong thing to do.
"Extending and improving the existing LABGI scheme would be a shot in the arm for the 4.5 million small businesses that generate over half of the UK’s wealth."
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