The Prime Minister is to release an announcement stating that councils are to keep 100 per cent of business rates that they will collect from shale gas sites, being double the current figure of 50 per cent.
This commitment from David Cameron could be worth up to £1.7 million a year for a typical site and will be directly funded by the Government.
This means that community benefits for local people will be strengthened.
Last year, it was announced that local communities will be receiving £100,000 when a test well is fracked and a further 1 per cent of revenue if shale gas is found in the well. This would mean that a typical production site could be worth £5 to £10 million in its lifetime.
The industry today additionally confirmed that it will further consult on how the money can be best shared within the community, with options to include cash payments to people in a close proximity to the site and setting up local funds directly managed by the communities.
The decision by the Government to back the shale gas industry is part of a long-term plan to create a more competitive and strong industry, whilst creating more jobs and providing a stable source of energy.
David Cameron said:
"A key part of our long-term economic plan to secure Britain's future is to back businesses with better infrastructure. That's why we're going all out for shale. It will mean more jobs and opportunities for people; and economic security for our country."
Shale gas is thought to be a huge economic opportunity for the UK with research showing investment could reach £3.7 billion a year and supporting 74,000 jobs in the oil, gas, construction, and engineering sectors. The industry will today set out proposals on how best to secure a role for UK companies as part of the supply chain as shale gas production develops in the UK.
Energy Minister Michael Fallon said:
"We already knew that the development of shale gas could bring growth, jobs and energy security to the country, and now local councils and people will benefit from millions of pounds of additional investment."
The announcement today comes alongside the news that Total is set to commit £30 million pounds to drilling for shale gas in Lincolnshire. Total are the first major oil company to join the exploration for shale gas in the UK.