‘Enterprise zones could prove to be a waste of public money’
THE performance of the Welsh Government’s enterprise zones has been labelled by the Conservatives as “disastrous” and akin to farm subsidies in the failed Soviet era, with the cost to the taxpayer for every new job created since their creation in 2012 coming in at nearly £74,000.
There are eight enterprise zones across Wales including in Deeside, focused on advanced manufacturing and Cardiff Central, focused on financial and professional services.
For the five financial years, from 2012 to 2017, the zones received a total investment from the public purse of £221m, although the Welsh Government stressed that not all the money spent went directly to businesses located within them, but also went on strategic infrastructure and transport projects that directly benefitted not just the zones themselves but their surrounding areas too - including a rail extension and new station at Ebbw Vale and the Llangefni Link Road.
As a result they labelled the Conservatives’ analysis of the performance of the zones as being presented in a “misleading and misrepresentative way”.
Support to businesses in the zones include enhanced capital allowances and more favourable business rate reliefs.
New figures from the Welsh Gov- ernment show that from 2012 to the end of March this year, the £221m helped to create just under 3,000 new jobs (2,998), with a further 4,539 safeguarded and 3,169 assisted — defined as the gross number of jobs created by businesses in the zones in receipt of less intensive forms of assistance from the Welsh Government.
The total number of jobs created, assisted and safeguarded was 10,706, which gives a cost per job for the Welsh Government’s financial backing of just over £20,000 per job across the three categories.
For new jobs created since 2012 the numbers for each enterprise zone and total funding received was: Anglesey 502 jobs and £6.39m; Cardiff Airport and St Athan 137.6 and £13.8m; Cardiff Central 481.5 and £61.9m; Deeside 1,290 and £29m; Ebbw Vale 175.5 and £94.5m; Haven Waterway 356 and £9.3m; Port Talbot 49.5 and £3.7m; and Snowdonia 6 and £2.1m. For the financial year 2016-17 the zones created, safeguarded and assisted 1,744 jobs against a target of between 850 to 1350.
The target for the current 2017-18 financial year is 1,400 to 1,900.
The Welsh Conservatives said that with the £221m invested between 2012 to 2017 only supporting the creation of 3,000 new jobs - at a cost of £73,731 per role - it showed that despite initial claims of a focus on creating new employment, the Welsh Government’s support in practice has been far more focused on subsidising the retention of existing jobs.
And Shadow economy secretary, Russell George said that the enterprise zones “could prove to be the biggest waste of public money in the devolved era”
And he is calling on the Welsh Government to ensure that the zones provide value for money in 2018.
Mr George added: “2018 must be the year of delivery for enterprise zones.
“We need to see tangible evidence that the zones are delivering value for money or ministers will have to look at other ways to create new jobs.
“When enterprise zones were launched in 2012, we were told they would strengthen the competitiveness of the Welsh economy, but there’s little evidence of those claims coming to fruition.
“Some of the zones have clearly under performed, and in the long run this policy could prove to be the biggest waste of public money in the devolved era.”
Leader of the Welsh Conserva- tives, Andrew RT Davies, said: “Labour’s enterprise zones have cost the Welsh taxpayer hundreds of millions of pounds – with very little to show for the money.
“Some of the zones have been absolutely disastrous, supporting only a handful of jobs.
“Instead of creating vibrant hubs for entrepreneurship, enterprise zones look more like the subsidy farms of the Soviet era. Sooner or later the question has to be asked; is it time to stop throwing good money after bad?”
A spokesperson for the Welsh Government said: “Once again the Welsh Conservatives have presented our figures in a misleading and misrepresentative way.
“The total figures include wider investments we have made in dozens of major infrastructure projects across Wales - such as the A465 dualling programme, the Llangefni Link Road, the Cardiff Bay link road, the dualling of the A40 as well as the Ebbw Vale rail extension and new station.
“All these projects have directly benefitted businesses within the zones and surrounding areas.
“The Welsh Conservatives should welcome the fact that our enterprise zones have attracted considerable private sector investment and supported over 10,000 jobs since 2012.