Councils handed £26bn of business rates to back growth-supporting infrastructure

The Chancellor is to hand councils all business rates levied in their areas and phase out local government grant, so that if they build infrastructure that boosts growth they will "reap the benefits".

He said that proud cities and counties should not come to Whitehall with "a begging bowl" for projects, as with grant funding. They will be able to "cut [rates] as much as they like to win new jobs," potentially reducing available funding. Those cities with elected mayors - set to be at least London, Manchester and Sheffield - will be able to add a premium to the rates specifically to pay for new infrastructure. 

Commentators highlighted that those cities with less private sector activity would be worse off, but the Local Government Association said it was "great news," giving councils "the flexibility to reduce rates," with increases in tax-take kept as "a vital boost to investment in infrastructure".