Dec. 15 (Bloomberg) -- A 2.3 billion-pound ($3.8 billion) U.K. government program to guarantee loans to car makers and their suppliers has yet to release any money, almost a year after it began.
The Automotive Assistance Program was launched on Jan. 27 to underwrite loans of more than 5 million pounds to firms with a turnover above 25 million pounds. The government agreed to lower the threshold to 1 million pounds on the advice of Parliament’s Business Committee to encourage companies to use the facility.
In a further report published today, the committee said the program still has yet to underwrite a single loan, highlighting the difficulties faced by Prime Minister Gordon Brown’s government in trying to keep investment going through the recession.
“The scheme seems to have been a wasted opportunity to support this important manufacturing sector during the recession,” Business Committee Chairman Peter Luff said in an e-mailed statement. “It is up to the government to prove us wrong, but they must ensure that funds are released to companies very quickly.”
The Business Department said in an e-mailed statement it was negotiating with 10 companies to underwrite loans worth 2 billion pounds.
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