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Concerns raised over cost of Enterprise Zones job creation

Published 28/02/2011

Major concerns about the cost of creating jobs through Enterprise Zones were raised today as the Government was urged to revise past schemes if it plans to announce a new programme in next month's Budget.

The Centre for Cities think tank said cost per additional job created in the zones of the 1980s was £17,000 over a 10-year period, which was equivalent to £26,000 in today's market. The Enterprise Zones did not create enough jobs and were too costly for the public purse to be effective for the 2010s, said Centre for Cities.

Secretary of State Owen Paterson announced in 2008 that he wanted to come up with a blueprint for creating a Northern Ireland enterprise zone, although the plan for a private sector-led recovery here has yet to be published.

It called for the Enterprise Zones of the '80s to be revised if the coalition plans to include them in the March Budget, and suggested that Local Growth Zones that can be matched to the needs of the local economy would present better opportunities for real economic growth and job creation.

Alexandra Jones, Chief Executive for Centre for Cities, said: "It is vital that the coalition learns the lessons of the '80s. Our evidence shows that 1980s-style Enterprise Zones did not deliver jobs or skills development on the scale that is needed today. A new approach to area-based growth is required."

Meanwhile, The Work Foundation said in a separate report that previous Enterprise Zone jobs cost up to £23,000 to create, equivalent to £50,000 today.

Andrew Sissons, researcher and lead author of the report, said: "The key issue is that Enterprise Zones don't tackle the real problems that local areas face. Providing artificial incentives to businesses in the short term will have little lasting effect without action to tackle the underlying drivers of competitiveness."

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