London local government will be able to keep all its business rates growth next year as part of a 100% retention pilot.
Phillip Hammond used today’s Budget to allow the 32 London boroughs, the City of London and the mayor to keep additional business rates income raised locally, which in 2018/19 is forecast to be in the region of £240m.
The boroughs will not retain revaluation growth.
The announcement builds on the devolution deal signed last spring by the city’s leaders, who have since been devising a scheme for the distribution of additional business rates.
London Councils chair Cllr Claire Kober said: ‘This is an essential step towards more sustainable funding of the local services on which Londoners and London’s businesses depend.
‘It will enable further investment in the vital infrastructure to support economic growth and create more jobs across London.
‘Agreeing a business rates scheme for London, between the mayor and all the boroughs, has been the key to the Treasury agreeing that London can keep more business rates revenue and shows our collective ambition to better serve London's residents and businesses by gaining more control over our city's finances.’