A flagship £1billion government scheme to promote growth and jobs in the private sector is set to cost more to administer than it has paid out to support small businesses. Mr Osborne used his first Budget last June to announce a "National Insurance holiday" which he said would benefit around 400,000 new business start-ups outside London, the South East and the East of England.
The scheme which exempted new businesses from up to £5,000 of employers' National Insurance contributions for each of the first 10 employees they hired in their first year of operating - saving them up to £50,000. Ministers hoped the holiday would help create around 800,000 new jobs over three years and said it could end up seeing £940million paid out by The Treasury.
However, since its launch last September just 5,137 firms have benefited, helping to create just over 10,000 jobs, according to figures supplied by David Gauke, the Treasury minister. With an average benefit per business of £2,000, that means around £10.3 million has been paid to companies – less than the £12 million the Treasury says the scheme will cost to administer.
Ed Balls, the Shadow Chancellor, said: "George Osborne hailed this flagship policy last year saying it could create 800,000 private sector jobs. But it's turned out to be a total flop."
The Sunday Telegraph