The Mayor of London, Sadiq Khan, has announced plans to invest £140m into projects such as business space, transport infrastructure and schemes to bring new housing on stream.
The funding is a result of London’s newly won ability to keep a greater share of the business rates income that it generates.
Last year, the mayor and London Councils struck a landmark deal with government for the capital to pilot the retention of 100 per cent of business rates growth from this April.
This agreement will raise an additional £114m for the Greater London Authority in 2018-19. Khan has also agreed to add an additional £26m to make an overall fund totalling £140m.
The money will be spent on initiatives that will grow London's economy such as new commercial space and transport infrastructure.
It will also be used to help tackle the housing crisis, which is a barrier to businesses recruiting and retaining the skilled staff they need.
Khan said: “This is a fantastic example of devolution in action as it shows that when tax revenues are devolved to London government we are able to focus investment on the things that matter most to Londoners, including key infrastructure and support for businesses.
“It also shows that it is possible for London’s boroughs of different political persuasions to come together and work with government to act in the best interests of the entire city.
“We will now decide exactly where this money will be best spent to boost the capital’s economy.”
The mayor will be inviting bids from across the Greater London Authority group for projects that will enhance London’s economy. It is expected that he will make decisions on which projects to support in May 2018.
A separate ‘collective strategic investment’ pot using 15% of the business rates growth generated from the 100% pilot will also be created.
Decisions on how this will be allocated will be made by the leaders of the capital’s 33 local authorities and the Mayor collectively during 2018-19 with the intention that every region of the capital will benefit.
Cllr Claire Kober OBE, chair of London Councils said: “We know that London’s councils are best placed to deliver on behalf of their communities, and this additional funding underlines how much can be achieved when all of London’s boroughs work constructively together in the best interests of the capital’s residents and businesses.
“This underlines how much can be achieved through devolved powers. The time is right for central government to give further powers to London, including the freedom to develop a fairer business rates system that can help the economy to grow and thrive.”
In the meantime, the mayor and local councils continue to lobby the government for a fairer business rates system, following last April's revaluation.