The government’s widely anticipated plans to revive enterprise zones are likely to prove costly and ineffective, according to the Work Foundation.

The return of enterprise zones, used between 1981 and 1996 to boost areas of economic decline, is widely expected to be announced in the forthcoming Budget.

However, according to a Work Foundation report, they typically provided only a three-year boost to an area, before it slipped back into depression.

The think tank found that each job created in the 38 enterprise zones created costs of £23,000, the equivalent of £50,000 today.

Four out of five jobs (80%) displaced jobs from areas outside the enterprise zone.

Andrew Sissons, researcher and lead author of the report, says: “Looking at enterprise zones 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 enterprise zones for the 21st century is likely to be equally ineffective.”

The report argues that if the government is to go ahead with enterprise zones, it should consider making them larger to avoid displacing jobs from the same towns.