Local government leaders have warned that Government plans to cut funding to a business scheme will hit council tax payers hard. The LABGI scheme, which came into effect in April 2005, aims to provide financial reward to councils whose policies directly assist local business growth and development. The scheme has seen councils receive nearly £1bn. But despite the success of the scheme councils will receive no funding next year and just £150m over the following two years, a funding cut of £850m or the equivalent of nearly £40 per household. Ahead of next week's budget council leaders at the Local Government Association are calling on the Treasury to maintain the rate of funding. ‘It make little sense for the government to cut back on a scheme to bolster local business at a time when the local economy needs all the help it can get,' said Sir Simon Milton, chair of the LGA. ‘From 2010 councils will be able to raise supplementary business rates, but this still leaves a gap of three years where councils will experience a shortfall.'
