Allen & Overy has become an unwilling participant in an ugly political row after accepting a £2.5 million grant from Northern Ireland's regional development agency.

The Magic Circle firm is currently offshoring 180 jobs - that's law firm speak for making business support staff redundant and then hiring new ones somewhere else, in this case Belfast, at lower rates. A&O looked at a number of other locations for the new support hub before settling on Ulster - although it could have been worse, as Cairo was also in the running. And no doubt £2.5 million of hard cash from Invest Northern Ireland would have been a significant factor in the decision.

    A political fight yesterday

But the thought of cash being given to a City law firm to splash out on whatever it wants has raised hackles in the NI Assembly. With the NI local elections looming on 5th May, the Ulster Unionist Party has loudly grumbled that the money should be spent on those living in the province. Although of course with 300 staff to be employed, plus the costs of setting up a shiny new office, much of the money will in reality be pumped straight back into the local economy.

On the face of it offshoring looks like an easy way to push down overheads and pump up PEP with a single stroke (and that's even without backhanders grants). But experience has shown that it's rarely that simple. A&O might be able to make some savings and has bagged some easy cash, but it has also copped a load of unwelcome publicity in the national press.

A spokesman for A&O said "we look forward to establishing our new office in Belfast during the autumn and to making a significant contribution to the local economy."

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