Communities near fracking sites will be given the power to decide how to spend the money they will gain through a new Shale Wealth Fund, even if they choose to hand the cash directly to local residents, the government confirmed today.
The fund will provide up to £10m for each community close to an approved site and will initially consist of up to 10 per cent of tax revenues arising from shale gas production.
The Treasury has said the cash could go towards local projects such as sports facilities and libraries, improvements to transport links and the restoration of heritage sites.
But, in a statement today, it added the funds could be "paid directly to local residents in host areas".
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The Treasury's exchequer secretary Andrew Jones said:
Shale production could play an important part in the UK’s future energy security, creating jobs and boosting our economy.
The economic benefits must be shared with those living alongside these sites and this funding will ensure local people reap the rewards too.
The government has granted local autonomy in response to a consultation that ran from August to October last year. It first said it was intending to consult on the Shale Wealth Fund in the 2016 Budget.
Those living in the north and the Midlands, where there are significant shale gas reserves, are set to benefit first. It's been estimated the exploration of shale could create around 65,000 jobs, attract up to £33bn in investment and also generate greater energy security.
Environmental campaigners have been critical of the fund, which they view as a pay-off to attract communities that might otherwise oppose fracking.
"The government has recently admitted both that Britain is on course to miss its climate targets and that fracking is wholly unnecessary. Ministers pushing to fast-track fracking are doing so because they're invested in the industry, literally and ideologically. But, with just 13 per cent of British people supporting fracking and 82 per cent backing renewables, it's clear they have resorted to bribery at its most blatant," said Keith Taylor, Green MEP for the south east.
"To add insult to injury, the government has the temerity to claim the 'wealth fund' will 'empower' the very communities who have had their local democratic opposition to fracking ridden roughshod over."
In August, a geology professor warned the government should have an alternate plan in place for future gas supplies as the UK's shale deposits were formed 55m years too late to hold substantial amounts of accessible gas.