A plan to allow local councils to retain all the money they raise from business rates has been given a cautious welcome in Kent.

Chancellor George Osborne sprung a surprise in his speech to the Conservative party conference by announcing that he was to hand complete control over business rates to town halls.

He also announced that the government would abolish the uniform business rate - the additional government levy which forms part of the bill.

He described it as the "biggest transfer of power to local government" in recent history. saying the change would mean cities and communities no longer had to go to the government "with a begging bowl".

He said: "All £26bn of business rates will be kept by councils rather than being sent back to Whitehall."

Cllr Peter Fleming (Con), the leader of Sevenoaks District Council, said the news was a "massive surprise."

"Frankly, if this is the case, it is the biggest reform in local government for a very long time.It represents the biggest transfer of power to local government for a very long time. What we put in and get back is not the same."

He added that it would permit councils to be much more flexible when it came to raising income but more importantly, give councils a way of driving investment into struggling areas.

Cllr John Simmonds (Con) Kent County Council cabinet member for finance, was more cautious but welcomed the idea. "It will be interesting to see how they roll this out. It will give us some welcome freedom but we have been let down before."

"The more investment a local authority can get into its area means the more business rates it will be able to collect..." - Paul Wookey, Locate in Kent

Locate in Kent - an agency which tries to attract businesses to the county - said the changes to business rates are likely to make councils more competitive.

Chief executive Paul Wookey said: "The more investment a local authority can get into its area means the more business rates it will be able to collect."

"Every council will now be taking the same approach which could make it harder to get firms to move to your area because everyone will be trying to attract more business.

"It might also remove some barriers to speculative developments because builders will not have to pay rates on premises that no one has moved into."

The Federation of Small Businesses also gave a cautious welcome.

National chairman John Allan said: “The surprise announcement to allow councils to retain Business Rates presents a huge opportunity for local authorities and business to work together to boost local growth, develop a fairer tax system and create the jobs of the future."

Clive Stevens, executive chairman and head of taxation at Kent accountants Kreston Reeves, said: "Councils will be able to set their own rates and many will hope that this leads to reduced costs given the pressure of local accountability.

"Perhaps this can be seen as a first stage to devolution for England? After all, it does not apply to the other areas of the UK.

"There has been a trend for some time in the USA to grow power in the regions and some major US cities now have considerable autonomy in their areas."

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ANALYSIS by political editor Paul Francis

Councils have an uneasy relationship with government when it comes to finance, arguing that they should have far more autonomy over what is in their piggy bank.

And the way business rates work, insisting that councils hand over to central government every penny raised has long been a running sore.

So, Osborne deserves some credit for releasing the financial shackles on town halls when it comes to business rates.

It is not exactly devolution but it's certainly a sign that the government wants to hand more powers to councils.

The abolition of the uniform business rate - seen as a device to give central government a bigger slice of the cake - will also spread some cheer.

There are issues, however: the freedom to set lower business rate levies will undoubtedly lead to competition between authorities. Will it be a race to the bottom?

And councils in rural shire areas, with fewer businesses, may be concerned at losing out to urban authorities where there are higher concentrations of businesses.