�2.3bn car loan scheme had no takers
Not a single loan or loan guarantee has been made under the Government's automotive assistance programme (AAP), a report from MPs said today.
AAP, involving a £2.3 billion package of loan guarantees to Britain's carmakers and large suppliers, was announced in January this year. But "little progress has been made in releasing funds through this scheme," said a report today from the House of Commons Business Innovation and Skills Committee.
The committee's chairman Peter Luff said: "When it was announced, AAP represented a genuine opportunity to help the automotive industry. But it is now December and not a single loan or loan guarantee has been made. The scheme seems to have been a wasted opportunity to support this important manufacturing sector during the recession.
"It is up to the Government to prove us wrong, but they must ensure that funds are released to companies very quickly. It is late in the day for this to happen, so the Government must act soon."
The committee welcomed the creation of the new Department for Business, Innovation and Skills in June 2009. Mr Luff said: "Locating the further and higher education sectors and the business sector in a single Government department is a positive move.
"In the real world the two sectors rely on each other, and this relationship is now mirrored in Whitehall. We hope that the department is now given the time to deliver the benefits that should flow from this change."
A spokesperson for the Department of Business, Innovation and Skills said: "It is important to understand that the AAP is about long-term investment projects, rather than short-term rescue. We have to work at the pace demanded by the companies and also have to consider the best interests of the taxpayer.
"Following direct contact with over 90 companies we are now working on detailed plans with some 10 companies as part of the AAP on projects worth around £2 billion."
The spokesperson went on: "As always, when taxpayers' money is at stake we must ensure that we are offering the right support to the right companies. And as we have seen with Jaguar Land Rover, some companies are able to secure funding from other sources, which is good news for both the industry and the taxpayer. We are pleased that the committee welcomes the creation of the new department, bringing business and further and higher education under one roof."