BOLTON will receive a cash windfall of nearly £1.5 million to encourage business growth.

But business support agencies in the town are worried that the cash will be used for general council funds, and not be put directly back into the business economy.

The Local Authority Business Growth Incentive Scheme (LABGI) rewards councils which promote the greatest levels of continued economic growth by allowing them to keep increases in revenue from business rates.

This is the second year of a three-year scheme which expects to see up to £1billion allocated to local authorities by 2008. A total of £126 million in grants were paid nationally last year, and this has risen to £316 million for 2007.

This year, Bolton is set to get a payment of £1,495,578, an increase of nearly 50 per cent on last year's £717,867.

But there is concern that the money is not earmarked for business and goes into Bolton Council's general funds.

Kirsty Rawlinson, Bolton Local Policy Manager at Greater Manchester Chamber, said: "The fact that Bolton is receiving more money under this scheme is good news. It suggests that the local economy is doing well as the figure awarded is based on the amount of business rates collected in an area. The more businesses an area has, the more it should collect in business rates.

"What does concern us, however, is that the money awarded under this scheme doesn't have to be spent on helping business. We would like the money to be ring-fenced so that it has to be spent on something that will benefit businesses."

Steve Arnfield, Bolton Council's director of finance, said: "What needs to be realised is that we are already investing heavily in the business community. We have to be in order to reap rewards like we are doing.

"This money is not coming to us because businesses in Bolton are paying more, but because the rateable value of the town's business premises are going up.

"We have made investments at Middlebrook, where new offices are going up all the time.

"What needs to be understood is that while we do invest in projects such as roads and transport and anti-crime and vandalism initiatives, these are all areas that are of benefit to the business community as much as anyone else."