The paper implements a methodology for assessing the regional impact of investment grants on foreign direct investment (FDI) location, taking data for U. K. regional policy over the period 1985-2005. Using a Generalized Methods of Moments estimator it finds that each 25 pound million of grant changes the regional location of about six inward FDI projects. On average, projects have 150 jobs and each job diverted costs 27,500 pound (1995 prices). It also finds that the size of the area designated for grants has a positive location effect. The effect is small in relation to the overall scale of FDI, which may explain the weak grant effect found in recent plant-based location studies.