By Max Clarke
Business author and social entrepreneur Robert Ashton warned the Chancellor today that his proposed Enterprise Zones would be a further burden to the unemployed unless they received special provision.
“The Thatcher Government’s of the ‘80’s were keen on Enterprise Zones,” he said, “but we know that 80% of the jobs they created were just displaced from elsewhere.”
“To make Enterprise Zones work for the people with the greatest need of a local job, the package needs to include provision for benefit safety nets and outward investment.”
The Chancellor George Osborne announced a £100 million job initiative centered around ten new enterprise zones in the Midlands and the North at a speech in Cardiff last week.
“The unemployed are the people who take the biggest risk when they leave benefits and create businesses or take employment. They need to know that they can return to the same level of benefits if things don’t work out because otherwise they will not make the leap into work,” said Mr Ashton, who is the author of the bestselling ‘How to be a Social Entrepreneur’.
“We need outward investment to make it easier and advantageous for people already within the Enterprise Zones to create community enterprises.”
The Chancellor’s Enterprise Zones will offer businesses individual tax breaks, simplified planning rules, discounted business rates and superfast broadband.
Conservative Governments under Margaret Thatcher and John Major both displayed a penchant for creating Enterprise Zones and 38 were established between 1981 and 1996.
A survey of 80’s Enterprise Zones by the Work Foundation reported that 80% of jobs in enterprise zones have just been displaced from elsewhere and that each job created within them cost £23,000.
“Without adjustments to the plan Enterprise Zones will simply end up with workers commuting in from elsewhere and the employment areas simply affluent oases in a desert of deprivation,” said Mr Ashton.
“Additionally, Community Investment Tax Relief (CITR) that is currently under review and not guaranteed to remain after March 2012 needs to be enhanced in Enterprise Zones. This will encourage (local) private investment in social lenders who are able to support those community enterprises with accessible finance, practical enterprise experience and mentoring.”