Click here to find out more!Flop Government NI scheme creates just 1,200 jobs in the whole of the West Midlands 

 Treasury’s admission that the scheme nationally has cost more to administer than the support it provided.

Just 1,200 jobs across the entire West Midlands region were supported by the Government’s flagship jobs creation scheme, Treasury figures have revealed.

George Osborne, the Chancellor, announced in July 2010 that businesses in regions where the private sector was struggling to create jobs would enjoy a £5,000 discount on National Insurance payments for new employees.

The scheme, which applied to the first ten employees hired, was designed “to help create new businesses in those regions where the private sector is not nearly strong enough”, he said.

But official figures suggest the policy has been a flop in the West Midlands.

 

Just 434 businesses successfully applied for the discount – and just 1,241 jobs were supported.

It follows the Treasury’s admission that the scheme nationally has cost more to administer than the support it provided. Across the country, firms have received discounts of £6 million to support 10,000 jobs, while the administration costs so far have been £12 million.

The discount was available in every part of the UK except London, the South East and the East of England.

In the whole of Birmingham, 231 jobs were supported. A breakdown of successful National Insurance holiday applications by constituency shows that 97 of these were in Ladywood, which includes much of central Birmingham.

In Coventry, there were 49 successful applications. And in Wolverhampton, there were 46. In Solihull, 22 jobs were supported. In Bromsgrove the figure was 25 and in Redditch it was 23.

David Cameron, the Prime Minister, admitted the results of the policy had been disappointing in a speech last week.

Talking to business leaders in Maidenhead, he said: “The scheme has not worked as well as we hoped. It was too complicated and too targeted at specific businesses.”

He added: “You can come up with all the schemes in the world but there’s no scheme that’s as good as controlling spending and keeping taxes down. Just like every business needs to control costs, governments aren’t any different,” he added.

The National Insurance holiday was to help rebalance the economy by helping create private sector jobs in areas considered overly reliant on the public sector, which were likely to be hardest-hit by spending cuts.

Labour has called on the Government to extend the scheme to other parts of the country.

Shadow Treasury spokesman Owen Smith MP said: “Now that the Prime Minister has admitted the scheme has failed – and more importantly why it failed – the Government should heed Labour’s calls for the tax break to be extended to all small firms that take on extra staff in every part of the country.”

The most recent unemployment figures show that the West Midlands has an unemployment rate of 9.2 per cent, above the UK rate of 8.3 per cent.

This is lower than Yorkshire and Humberside, the North East of England and London, but higher than every other part of the country.

It means 243,000 people are unemployed in the West Midlands. The figure is up by 1.1 per cent over the past 12 months.

The number of people in work in the West Midlands fell by 1.4 per cent over the past year – the second biggest fall in the country, after the north east which suffered a fall of 1.5 per cent.

 

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