Clegg's costly jobs scheme clanger

Jobs created by the Regional Jobs Fund scheme could cost the taxpayer as much as £200,000 each, according to the NAO.

by Michael Northcott
Last Updated: 19 Aug 2013

Nick Clegg and David Cameron have a love-hate relationship in the coalition government, ideologically opposed to many of each other’s policies. But the effect of one of Clegg’s ideas, the Regional Jobs Fund, is now measurable and has yielded, well, mixed results. The National Audit Office (NAO) said today that whilst the average cost per job would be around £33,000, some jobs created could cost the taxpayer as much as £200,000.

The figure sounds troubling, especially as the scheme's raison d’être is to create private sector jobs in regions which have historically been dependent on government spending. But on the positive side, the NAO added that the £1.4bn awarded by the fund so far could lead to an extra 41,000 jobs over the next seven years, and that it was successfully targeting state-dependent regions of the country. 

The report also said that the scheme was delivering returns broadly in line with other similar initiatives (although it doesn’t name any), but also that jobs subsidised so far could have been delivered at 75% of the cost already incurred bythe taxpayer. This is the bit that doesn't look so good, given the government's concern with saving money.

At the moment, the funding has to be applied for in competitive bidding rounds, in an attempt to find the best value for money. But the NAO’s report recommends the fund apply ‘tighter controls over value for money offered by individual bids, for example by comparing costs per job to evidence-based benchmarks.’ 

A jargon-heavy way of saying that the scheme, like all such job-creation schemes before it, isn't working very well.

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