The aim of the Growth Incentive Scheme for Wales is to increase the incentive for local authorities to work in partnership with local businesses and others to maximise local economic growth and regeneration.
'We recognise and support the important strategic role local authorities play in the economic development of their areas and the overall prosperity of Wales. Local authorities bear many costs of economic development, though they do not directly benefit from the increased business rates generated. This proposal aims to reward their contribution and encourage strong and successful partnerships between local authorities, business and other local players,' she said.
Under the proposals a baseline will be set on the total rateable value for each local authority. The authorities will then be allowed to retain some or all of the business rates generated in excess of their baselines, and they will have complete freedom on how the extra revenue is spent.
The consultation paper sets out options the Welsh Assembly Government is considering under Section 70 of the Local Government Act 2003.
Local authorities and the business community and will be consulted on the proposals. The consultation closes on 8 December. It is envisaged that the scheme will be launched in April 2005.