I am welcoming the announcement by Communities Secretary John Denham that Birmingham will be receiving over half a million pounds (£693,685)  from the government to help small businesses grow. But I am calling on the council's Chief Executive to ensure that the money goes directly to small businesses.

The government's Local Authority Business Growth Incentive Scheme helps to promote economic growth through grants to small and new businesses in hard hit areas who often need extra support to get through the tougher times so they can hit the ground running as economic growth picks up. Since 2005-06 over 350 councils have already shared £980m and today, an extra £50 million is being distributed to councils.

I am thrilled that Birmingham is receiving money to help small and new businesses but I want to be sure that the council will correctly identify businesses that really need it and get the money to them quickly. Too often, this council gets grants from the government and people get no say in what happens to it.

Communities Secretary, John Denham said: "Through our Real Help Now plan, we have committed a billion pounds to create more than 150 000 jobs and guaranteed everyone under the age of 25 a job, training or work experience if they are out of work for over six months and given struggling small businesses financial support through our billion pound Enterprise Finance Guarantee and tax payment deferrals."

• The Local Authority Business Growth Incentives (LABGI) scheme provides councils in England with a government grant to spend on local priorities. Today's announcement confirms that all authorities will receive LABGI in 2010-11. LABGI grants are not ring-fenced.

• Since 2005-06 over 350 councils have already shared £980m. No funding was allocated for the 2008-09 financial year, while the Government worked through a consultation on simplifying the scheme. The reform shape of the scheme was announced July 2009 and, in September, £50 million was distributed to qualifying authorities (almost all of them).

• LABGI measures business growth through the business rates delivered by each sub-region on a rolling three-year basis. Local authorities and other interested stakeholders are invited to comment on provisional allocations by or on Monday 29 March 2010. There are no changes in the underlying methodology by which rewards are calculated. Grants are calculated for 55 sub-regions, and then distributed to local authorities according to population size. In two tier areas rewards are split equally between district and county councils.

To view grant allocation and criteria, visit http://www.communities.gov.uk/documents/localgovernment/pdf/1344480.pdf