Welsh Enterprise Zones, or Subsidy Farms?

Russell George argues that new data shows the Welsh Government’s Enterprise Zones have failed to deliver

Russell George is Welsh Conservative Assembly Member for Montgomeryshire and Shadow Economy Secretary.

Enterprise Zones can take longer to yield results than the public might imagine. In government, the seed of an idea can often take years to germinate – much to the frustration of opposition politicians like myself, who want to see evidence of something sprouting from the flower bed as soon as possible. Particularly where public money is committed.

Patience is key, for sure. But five years is long enough to wait for results.

The Labour Government left itself open to criticism from the start because they were too slow to set them up – allowing competing zones across the border to steal a march on Welsh firms.

In fact, they’ve never quite managed to shake off that false start, or to instil public confidence that they can create jobs or demonstrate value for money.

In that time, more than £220 million has been invested by the Welsh Labour Gvernment in the zones – but it’s difficult to see evidence of growth. And to make matters worse, at every stage since they were established the Welsh Government has sought to keep information away from prying eyes.

Despite Written Questions, FOIs, letters and articles, successive ministers have refused to disclose the number of new jobs created by the zones.

We’ve been consistently fobbed off with a global figure, comprising an impenetrable combination of jobs ‘created, safeguarded or assisted’.

Labour’s enterprise zones could be the biggest waste of public money in the devolved era – but you have to admit that it’s difficult to tell.

Until now, that is, because the most secretive use of taxpayer cash (since the mythical Delivery Unit) just pulled back the curtains at long last.

We now know for a fact what we already suspected: that some of the zones have been absolutely disastrous, supporting only a handful of jobs – creating even fewer.

As we argued all along, there is a world of difference between a created or safeguarded job, and an “assisted job” – whatever that actually means.

It’s this kind of opaque reporting which muddied the waters and bred cynicism.

It’s Orwellian double speak. It could mean anything, or nothing at all: from a friendly phone call or a cup of tea, to a firm receiving an information leaflet or a brochure.

So, what have we learnt from this new data?

£220 million spent on fewer than 3,000 jobs is – on  the surface of it – a very poor return.

When they were launched by Edwina Hart in 2012, we were told that enterprise zones would “strengthen the competitiveness of the Welsh economy”.

Bold claims. And difficult to believe for someone who’s lived through four major refreshes of Welsh Labour economic strategy in the devolved era, with little sign of an end to the stagnation of the Welsh economy.

Despite those early claims it now appears that the focus has shifted – from enterprise, to subsidy.

These zones were supposed to enable job creation. They were meant to build capacity in specific sectors of the Welsh economy, and to build specific skills capacity in relation to those sectors.

But instead of creating vibrant hubs for enterprise, these zones look more like the subsidy farms of the Soviet era.

We were told that St Athan Enterprise Zone could deliver 10,000 jobs by 2025 – but in five years we’ve seen just 137 new jobs.

In Ebbw Vale, £94 million has been spent on just 175 new posts – at more than £500,000 a head.

In Snowdonia, £2.1 million spent and just 6 new jobs.

Ultimately, for the Welsh economy to thrive we need to build a genuine culture of investment and enterprise. It’s clear that these zones are not achieving that.

Sooner or later the question will have to be asked: is it time to stop throwing good money after bad?

All articles published on Click on Wales are subject to IWA’s disclaimer.

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