Cuts Watch #361: Grants for Business Investment
An important scheme that gives grants to protect jobs in Assisted Areas has been quietly decimated in a “stealth cut.” Grants for Business Investment is a scheme that gives grants to companies to create or protect jobs in deprived parts of the country. Its speciality is capital projects that wouldn’t otherwise go ahead on the same scale or in the same location. According to the Industrial Communities Alliance, over the past 6 years GBI has given grants worth £428m, creating or protecting 77,000 jobs.
Last October, the government announced it was going to abolish GBI. This announcement was made in two paragraphs on page 47 of the Local Growth White Paper, though the Department for Business conceded that it would “consider large scale cases on an exceptional basis.” This went pretty much unnoticed until last week when the Industrial Communities Alliance published a briefing and Pat McFadden MP took up the issue.
The ICA labelled the decision to abolish GBI “perverse”, pointing out that most GBI grants go to manufacturing firms and the government says it wants to reduce dependence on financial services and on the public sector. In addition, “GBI can only be given to larger companies in the Assisted Areas – mostly the less prosperous parts of the North and Midlands – yet the government says it wants to reduce the economy’s reliance on London and the South East.”