Magazine article Public Finance

Up to a Quarter of RSA Grants Are Given Back

Magazine article Public Finance

Up to a Quarter of RSA Grants Are Given Back

Article excerpt

Up to a quarter of government grants designed to attract businesses into deprived areas have to be returned as firms fail to keep their promises to bring new jobs and investment into the area, government figures have revealed.

Regional Selective Assistance grants can cover up to 30% of a company's capital expenditure, but to keep that funding, it must create or safeguard an agreed number of jobs, stay in the area for a specified period and meet investment targets.

In 2004/05, approximately £150m was awarded to companies to set up or remain in Britain. Foreign companies represent just a third of the value of allocated grants, yet figures reported to Parliament show that £37m - a quarter of the annual grant payout - had to be returned by multinationals.

A similar amount was repaid in 2001/02 and 1999/2000. …

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