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Khan unveils £140m of landmark devolution funding

The Mayor of London has announced a £140m investment to boost the capital’s economy.

The cash will go into a brand-new investment fund to support projects such as business space, transport infrastructure, and schemes to increase new housing.

Most of the funding is a direct result of the landmark devolution deal agreed for the capital last year, which allows the city to pilot the retention of 100% of business rates growth from April.

Retention of business rates is expected to raise an additional £114m for the Greater London Authority in 2018-19, and Sadiq Khan has pledged an extra £26m, to bring the overall fund to £140m.

Initiatives including commercial space and transport will also be funded, in addition to using the cash to help to tackle the capital’s housing crisis, which is a barrier to businesses ability to recruit and retain the skilled staff they need.

Mayor of London, Sadiq 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.”

The money is not yet earmarked for specific projects, and the mayor will invite bids from across the Greater London Authority group for projects that will enhance the city’s economy.

Decisions regarding which projects to support are expected to be made in May 2018.

A separate “collective strategic investment” pot, using 15% of the business rates growth generated from the 100% retention pilot will also be created, and decisions on the allocation of this will be made by leaders of the capital’s 33 local authorities and the mayor during the year.

Cllr Claire Kober OBE, chair of London Councils, explained: “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.”

She added: “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.”

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