Enterprise zones create 12,500 jobs but fall short of initial target

Enterprise zones have created fewer than a quarter of the jobs that the government had initially estimated they would generate by 2015, according to figures published today by the Department for Communities and Local Government (DCLG).

Chancellor George Osborne, with Birmingham City Council's former strategic director of development, Mark Barrow, announces the government’s approval of the Birmingham City Centre Enterprise Zone bid in 2011 (picture BCC News Room)
Chancellor George Osborne, with Birmingham City Council's former strategic director of development, Mark Barrow, announces the government’s approval of the Birmingham City Centre Enterprise Zone bid in 2011 (picture BCC News Room)

In a statement, the DCLG said that the 24 zones - which can include simplified planning approaches to speed up development and attract businesses - have created "12,530 jobs, attracted 434 new businesses and generated over £2 billion worth of private investment since opening for business".

The government had initially estimated that the enterprise zones could create 54,000 jobs by 2015, but, giving evidence to the Public Accounts Committee in March, DCLG permanent secretary Sir Bob Kerslake admitted that this figure was "wildly over-optimistic".

In a revised estimated, the DCLG concluded that across all the enterprise zones between 6,000 and 18,000 jobs could be secured by 2015, attributing the lower estimate in part to tough market conditions which lasted longer than expected.

In today's statement, the DCLG said that enterprise zones had provided a "major boost to the UK construction sector with work already carried out to redevelop 85 hectares of land and deliver more than 47,000 square metres of new or refurbished floor space".

Communities secretary Eric Pickles said: "We have worked hard over the past few years turning shovel-ready sites into job-ready sites.

"That work is now done and we are seeing more and more investors sign deals that will create tens of thousands more jobs over the coming years. That's great news for local communities and great news for the economy."

According to the Financial Times, Pickles is pressing for a second tranche of enterprise zones as part of the government's push to devolve more power to Britain's big regional cities.

A report published in May by the Public Accounts Committee found that enterprise zones had so far only created fewer than 10 per cent of the jobs the government said they would by 2015.

Public spending watchdog the National Audit Office has also warned that enterprise zones had been slow to create jobs and would face a significant challenge to produce the number of jobs expected.

In March 2013, Planning reported that the government had fallen short of its goal of getting simplified planning regimes in place for every enterprise zone in England.


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