The chancellor George Osborne has announced the Treasury will commit £100m in transport and infrastructure funding for Cambridge over the next five years.
The gain share agreement could be worth up to £500m to Greater Cambridge over the next 15 to 20 years, and has the potential to deliver more than £1bn of infrastructure investment in the area.
It will invest in new roads and transport to stimulate housebuilding and improve the connectivity between residential and employment centres.
The deal also aims to provide fast, reliable and affordable ways of travelling between business, employment and research sites in the area.
Council leaders, businesses and the University of Cambridge have welcomed Mr Osborn’s announcement, following more than a year of negotiations with central government.
Cambridge City Council, South Cambridgeshire District Council, Cambridgeshire County Council, The University of Cambridge and the Greater Cambridge Greater Peterborough Enterprise Partnership joined forces to secure the deal.
Members from all three councils will consider the details of the proposed deal over the next two weeks.
It is the largest and most complex of the second wave of city deals. The ‘gain share’ agreement is a financial arrangement that will reward Greater Cambridge for sustained improvements in economic performance over 15 to 20 years, beginning in 2014/15.
First stage funding
In December 2013, the deputy prime minister Nick Clegg announced the first part of the deal, comprising £6m to support a package of infrastructure works to provide access to the site of a proposed new railway station at Cambridge Science Park.
Work includes an extension to the existing guided busway to the site of the planned station, local highway improvements and pedestrian and cycle access.
Cambridgeshire County Council expects to deliver this access package by April 2015, with delivery of the station itself scheduled in 2016.
Once completed, Cambridge Science Park Station will enhance access to development sites including Cambridge Science Park and Cambridge Business Park, as well as to residential areas Arbury and Chesterton.
The Treasury has committed £25m of funding for 2015/16, according to the Budget document. More details on the next phase of investment will be available when the deal is formally signed.
It would see Cambridge City, South Cambridgeshire District and Cambridgeshire County Councils pool some of their own separate funding and powers, allowing for the creation of a single strategic vision for the future of the area.
Cambridgeshire County Council leader Martin Curtis said the funding “could be a real game changer, moving the economy of Greater Cambridge and the wider county towards becoming a real economic powerhouse”.
Cambridge City Council leader Tim Bick added: “This big extra infrastructure investment will speed the delivery of much needed Housing developments outside the city and strengthen public transport and cycling options inside the city.
“The commitment by the three local councils for fully joined-up decision making over planning and transport policy enables real leadership for the area.”
The first wave of eight city deals was agreed in September 2012, and the government then invited a further 20 cities to negotiate for the second wave of agreements.
City deals see the government devolve development powers to local bodies, including partnerships between councils and local enterprise partnerships, in exchange for taking responsibility for delivering growth.