In a move trailed earlier this week by Chief Secretary to the Treasury, Danny Alexander MP, in a speech made at the Cambridge Network event to launch Business Awards Week, the chancellor confirmed local authorities could fully retain extra cash raised from business rate growth.
Treasury has reached provisional agreement to allow Greater Manchester and Cambridge to keep 100% of the additional growth in local business rates as the national economy grows.
"For where cities grow their economies through local initiatives, let me be clear: we will support and reward them," Mr Osborne said.
"We back in full the long term economic plans we have for every region."
Under the pilot schemes, local authorities would retain 100% of any additional growth in business rates above existing forecasts and be free to invest this extra yield in new pro-growth economic schemes and infrastructure projects.
Cambridge Network’s CEO, Claire Ruskin, is very pleased with the announcement. She believes that the region can be trusted to make decisions that help the whole of the UK by being able to invest in the engine for growth that Greater Cambridge can be.
“We will be able to make local decisions more quickly and more effectively. Successful business leads to jobs and generates additional tax revenues for Treasury that are spent for the country’s benefit. Without successful trade and business no-one generates the income that is needed throughout the country for schools and hospitals, roads and houses, so wherever we have the ability to be entrepreneurial and grow small businesses into successful businesses we should do so.
"Cambridge is such a strong powerhouse, particularly in science and engineering, and this will help us to use our capabilities for the country.”
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