Enterprise Zones ‘ineffective’

A government initiative to incentivise firms to move to particular areas, or 'enterprise zones', is likely to be ineffective at stimulating sustained growth, a report suggests.

Do Enterprises Zones work? published by think tank The Work Foundation, warns that while enterprise zones, tax breaks and other localised incentives may stimulate rapid investment in the short-term, this typically lasts no more than three years before the area begins long-term reversal back into depression.

Evidence from prior schemes also indicates that up to 80 per cent of jobs “created” are in fact displaced from other areas.

Andrew Sissons, researcher and lead author of the report says, ‘Looking at enterprise zones created in the 1980s, there are serious doubts about the wisdom of bringing the policy back. Most of the areas that had such zones are still struggling today; places like Middlesbrough, Speke, Hartlepool and Swansea. Any attempt to redesign the enterprise zones for the 21st century is likely to be equally ineffective.’

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