Figures from Scotland's Regional Selective Assistance fund show that ink giant HP snaffled almost half the total cash given out in the last quarter. Between July and September, Scottish Enterprise via RSA gave out £14.8m. HP Enterprise Services UK Ltd got £7m of this to create 721 jobs in Erskine. In total, the £14.8m grants …
Don't government ever learn?
Paying companies to create jobs in a country doesn't work long term and it also sets a precedent.
It might tip the balance so that a company decides to set up a business in the UK. But as soon as they need to cut costs they will go back to the government with an ultimatum of "more cash or we close up shop".
It's crazy as governments need to believe in market forces. If the UK is too expensive compared to another country then change the tax regime or model such that it is more attractive.
But ultimately you can't compete with countries where pay is so much lower.
It's pointless even trying to compete on cost
This is just delaying the inevitable. That money would have been better invested in education (of the non pottery and social science varieties) or funding hi-tech start-ups.
From an AC who grew up a few miles from Erskine, but had to move 500 miles to find a decent engineering job.
I agree, the State shouldn't pay to keep people in work
We should pay them to sit on their arses collecting benefits, watching Trisha, and squeezing out another generation of workshy dolescum, right?
HP sauce !!!!!
So that is
1447 jobs for £14.8 million comes in at a little over 10k per job. So that must cover a sizeable chunk of those people's salaries, or most of their office running costs at any rate. I realise that's kind of a simplification, but I bet you could build some awesome startups with those kinds of subsidy.
You'd think so wouldn't you. 100 startups with 150k each to get going...
They even have some schemes, but the bureaucracy is so over the top that they take a third of the money administering the scheme, holding poncy awards ceremonies and generally farting around. A third has to come from elsewhere, and the company ends up spending most of the rest on lawyers, auditors and staff costs for the time it takes to actually get the money in the first place and then fulfill all the reporting obligations.
Net effect is that jobs are created monitoring each other spend money, and no actual work gets done. The only people it makes sense for are big companies that already have whole admin departments who can allay some of their costs that way.
I thought only banks were stupid enough to ask the government for handouts when business was bad.
This opens the door for pretty much anyone asking for handouts.
Too bad there'll be nothing left for the people...
£14.8 million for 1,447 jobs overall - that's around £10k per job.
£7 million for 721 jobs with HP - that's around £9.7k per job.
So HP saved the Scottish government £300 per job. Well done them.
Net job losses
Overall they've cut 129 jobs and been paid 7m. That's about 54k per job they've cut.
10k per job isn't an unreasonable subsidy from the government, if it saves them >10K in benefits, *but* it should come with strings.
If those jobs get removed or outsourced within, say, 10 years, the company has to give the 10k back. With interest. Or it doesn't get another penny.
Must have strings
*but* it should come with strings.
Absolutely. Government is there to run the country in the best way it sees fit (unless they're of the brown envelope variety of politician).
I've no problem with the theory of subsidising job creation, but there absolutely has to be some "refund" guarantees or at least the right of the subsidiser to pick up the remnants if it all goes pear shaped.
And - I'd love - I'D LOVE - if the government would give me £10k to create new jobs or save existing ones. That way I could sleep at nights, and not wonder whether we'll still be here next year.
Any £10k we got, would be spent sensibly, locally, creating work not just in this business but around us.
How many ?
I work for Dell so I'm not here to defend HP. I also don't disagree with the sentiment that the UK Gov. should think more about funding and support of startups.
I'd assume though that these numbers 721 are the direct number of jobs are those actually employed by HP. That being the case I'd be prepared to bet that there are 2-3x the number of subcontractors, suppliers, and other infrastructure that work with the 721. If the 721 didn't exist, then they likely wouldn't either.
At least this isn't one of those mega-lights-out-datacenters with just a couple of employees sucking the electricity and providing no other benefit.