The LABGI scheme is designed to give local authorities an incentive to maximise local economic growth. This is achieved by allowing authorities to receive a proportion of increases in local business rate revenues to spend on their own priorities in their local area. The scheme will create positive financial incentives for local authorities to work in partnership with business and other key players to maximise economic growth. LABGI will cover all local authorities but Police and Fire authorities will not be included. The Assembly Government is committed to ensuring that all revenues generated by the scheme will not be ring-fenced. Therefore local authorities will be able to use revenues in the way that they and their electorate consider best to maximise local outcomes.
The scheme does not give local authorities the flexibility to change the business rates multiplier. As a result no business will pay more tax than they otherwise would have done. However, businesses should find the scheme of major benefit to them, as it will increase the incentives for local authorities to understand and respond to the needs of local businesses.
The Welsh Assembly Government has recently consulted on the details on the scheme. The consultation document and the WLGA’s response are linked to this page.