Te myths about Assisted Areas


Te Assisted Area funding programme props up failing places and would be better spent elsewhere Evidence suggests otherwise. Incentives such as GBI have proven to be im- portant for increasing levels of business investment in the UK and in creat- ing and safeguarding jobs across the country – a cost effective solution to creating significant levels of private sector jobs, and there are numerous examples of the return on public investment of funding.


Assisted Area funding has not been effective in boosting struggling economies Te impact of Assisted Area status and funding should be judged relative to what would have been the case if the support had not been provided. Area assistance has had a positive impact and helped areas move forward, creating jobs and investment to a value that far exceeds the level of sup- port given.


Assisted Areas will have to be funded indefinitely Tere is no suggestion that places with Assisted Area status will always have a need for specific funding, for example GBI. Te current Assisted Area funding regime can be central to the Government’s aim in spatially rebalancing the economy. Area assistance should help places become self- reliant, with the support carefully withdrawn as this becomes evident; however the Government must ensure that Assisted Areas are supported as they continue to enhance their economic vitality.


Considerations in the design of economic policy


Tere are a number of considerations which the Government needs to address in the design and delivery of its emerging economic development policies.


Targeting public resources Evidence suggests that the most effective use of resources would be to target individual businesses to create the highest return on public invest- ment. Assisted Area funding has provided incentives for individual busi- nesses to invest and helped areas which are not economic growth nodes to markedly increase their resilience, providing considerable value for money.


Rebalancing the economy If local support is not available to Assisted Areas then decline will be at a heavy cost, particularly in terms of public resources. It will also mean that we are further than ever from a sustainable and balanced economy. Rebalancing the economy also requires increasing manufacturing activity;


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