Think tank in attack on enterprise zone return

The Work Foundation said the zones, which provide big breaks on tax and business rates, did not stimulate sustained growth in depressed areas.

It also raises major concerns about the cost of such policies, arguing that each new job created through any new EZ would cost the taxpayer around 50,000.

A campaign for EZ status recently surfaced in Scotland after Moray became the first region to call for a designated EZ following the closure of air force base RAF Kinloss. Property experts predicted more regions would shortly follow Moray's lead.

The Work Foundation claims that 80 per cent of jobs created by EZs are drawn from other areas as firms relocate to take advantage of the tax breaks.

Andrew Sissons, researcher and lead author of the report, said: "Looking at EZs created in the 1980s, there are serious doubts about the wisdom of bringing the policy back. Most of the areas that had such zones are still struggling today - places like Middlesbrough, Speke, Hartlepool and Swansea. Any attempt to redesign the EZs for the 21st century is likely to be equally ineffective."

One of the last EZs set up in Scotland was Maxim, a massive office park off the M8 that has remained largely empty since it was built in 2007. But despite the mixed results of previous schemes, Eric Forgie, chief executive of property agency James Barr, said Scotland's four main urban regeneration companies (URCs) would probably call for the same tax breaks allowed to any new EZs.

In the Scottish budget approved earlier this month, finance minister John Swinney returned about 6 million to urban regeneration firms after earlier threatening to cut funding.

But, since Swinney's turnaround, at least one URC, Riverside Inverclyde, has not yet confirmed with Scottish Enterprise if its funding would be restored after losing 70 per cent of its budget for the next year.