Business grant not enough for a round of drinks

The leaders of a Norfolk council were rubbing their eyes with disbelieve this week after receiving a miserly �158 and 4p from a multimillion pound government initiative.

The leaders of a Norfolk council were rubbing their eyes with disbelieve this week after receiving a miserly �158 and 4p from a multimillion pound government initiative.

More than �11m is set to be dished out to councils across the east of England over the coming days as part of the Local Authority Business Growth Incentives Scheme (LABGI), which aims to reward councils for successfully promoting economic growth.

But South Norfolk Council officials were less than grateful after being awarded a �158.04 sum that equates to about 0.0013p per head of the district's 117,300 population.

Local Government Minister John Healey confirmed the latest grants - calculated by assessing the business rate growth of local authorities - which could be used to meet local needs and priorities during the credit crunch.

Norwich City Council is set to receive more than half a million pounds whilst other local district councils will get funding boosts of between �200,000 and �50,000.

But John Fuller, leader of South Norfolk Council said he was left fuming at the authority's �158 allocation, which could not even buy a round of drinks for local business leaders.

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'It is an embarrassment for us and an embarrassment for the government. How could any reasonable person award half a million to Norwich and �158 to us? The Norwich Research Park falls into the South Norfolk area and has been identified in the regional plan as being one of the top areas for job growth in the whole of the East,' he said.

Mr Fuller added that the district council 'could not compete' in the LABGI grants scheme because the authority's business rate baseline was set in 2001 following the opening of the Norfolk and Norwich University Hospital at Colney and the Norfolk Police headquarters in Wymondham.

'It is more evidence that the government does not take economic development in the countryside seriously. They are totally focused on cities and the problems in our rural areas are wholly overlooked. We would have been better off putting two fingers up to the police and hospital because we have been paying for it ever since,' he said.

Garry Wheatley, cabinet member for finance and resources at South Norfolk, added that he thought the �158 figure was a 'mistake' when he first heard about it.

'It is very difficult to believe. It does not help at all and makes the situation worse in the sense that the government is not publically acknowledging the businesses we have in South Norfolk,' he said.

But a spokeswoman for the Department of Communities and Local Government (East) yesterday confirmed that the district council's LABGI allocation was correct and was not a typo.

'LABG payments are made to councils that achieve set targets on supporting business growth, measured as increases in business rateable value in a local authority area against historic levels. The funding is allocated on the basis of how much a council exceeds its target,' she said.

A total of �100m will go to 360 councils across the country - a third of the amount that LABGI distributed last year.

John Healey, local government minister, said: 'I am pleased to be able to confirm the share of �100m that councils will get, with no strings attached and extra to the core grant they receive, which will be a real boost to councils' coffers as they provide much-needed support to their communities - particularly in these tough economic times.'