Putting a price on jobs

So it costs the tax payer £200,000 to create a job in the north according to today’s NAO report. Fair dos if that post is Bob Diamond’s, but it’s probably not. The Regional Growth Fund is coming in for a lot of flack as a consequence. Conservative elements of the coalition will seek to blame the Lib Dems who championed the rebalancing in the first place, while wincing at comparisons with the RDAs. At £28,000 a go, they were £5,000 per job cheaper than the RGF (or so we are told).

Two quick reflections on this, one on policy and a second on how it’s been communicated.

The RGF has worthy ambitions but in seeking to provide a quick fix it has fallen into the same traps as the RDAs. They were also expected to report on the number of jobs created each year and reluctantly forced to spread their funding across a host of tactical initiatives rather than a handful of strategic interventions. There are reasons why the economy develops in an unbalanced way and private investors are unwilling to invest in certain areas; poor transport links, a lack of skills, the cost of remediating old industrial land perhaps. But rather than address these problems at the fundamental level and improve the environment for business, the RGF (and lots of RDA funding) focused on grants to individual enterprises that can only temporarily counterbalance the structural problems. It’s a solution that ticks political boxes (lots of things happen in lots of different areas) but is it really sustainable?

Then there’s the communications problem. Expectation management. £1.4 billion is not a lot of money. It’s just 0.2% of UK public spending. Even if it’s used to leverage huge investment from elsewhere there is only a limited amount that can be achieved. But with little else in the regional policy armoury, and no money to spend, we were told to expect a lot from a relatively modest programme. The problem was compounded when the job creation targets were set at the outset – a lesson that could have been learnt from the difficulties faced by the RDAs. In the desire to measure something, and account for public money, the programme has been a hostage to fortune. Jobs are at the mercy of a host of factors, not just RGF. Better from a policy and communications perspective to tell people about a small number of tangible high impact investments that will improve the business environment. People understand it and at least delivery sits largely in your own hands.

Jon Bennett
Director
jon@linstockcommunications.com