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Enterprise Zones

Volume 128: debated on Wednesday 2 March 1988

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To ask the Secretary of State for the Environment how his Department assesses the cost of each job created in enterprise zones; what that national figure is currently assessed to be; and what the assessed figure is in each existing enterprise zone.

The costs to the Exchequer of the enterprise zones comprise payments to local authorities for rate revenue forgone in the zones; tax revenue forgone as a consequence of allowances claimed for expenditure on industrial and commercial buildings there; and public investment in infrastructure and construction that would not otherwise have been made had the zones not been designated.

The number of jobs in the zones at the time of designation is deducted from the number present at the time of the assessment to give the number of net additional jobs on the zones.

The Department commissioned consultants to evaluate the experiment. They estimated that, at the end of 1986, the public cost of each net additional job within the enterprise zones in Great Britain was £8,500. Separate assessments have not been made for individual enterprise zones.

The consultants report ("An evaluation of the Enterprise Zone Experiment" Her Majesty's Stationery Office 1987) also includes a more refined method of assessing the cost per job, which takes account of the effects of the zones on employment in the areas around them. Copies of this report were placed in the Library on 22 December 1987.