Money held back in the second year of the Government's business growth scheme should be paid out as soon as possible, the LGA has claimed. Under the Local Authority Business Growth Incentive (LABGI) scheme, the Government held back £84m in grant in the second year, over fears that a legal challenge would lead to further payouts. The challenge, mounted by Slough and Corby BCs, was successful, and the LGA has called for the Government to hand over the rest of the money. The association has also called on to make the system ‘more simple, transparent and predictable'. A consultation on the process is due at any time, but the Government is thought to be having problems clearing proposals through Cabinet during the holiday period. LGA vice chair Margaret Eaton described LABGI as a ‘bureaucratic merry-go-round'. ‘The Government needs to assure authorities that there will be no clawback of LABGI grant already paid to them,' she said. ‘The outstanding grant payment, held back at the time, should be paid out as soon as possible. ‘After the Government lost its legal challenge (see The MJ, 2 August), the DCLG said it would not reduce any payments already made to councils. It is estimated that the ruling will effect up to a dozen authorities, but as yet, no figure has been put on the extra costs.`
