F&I Management & Training

A £2.3bn government scheme set up in January to provide funding for UK carmakers has yet to help a single firm, a committee of MPs has found.

The Automotive Assistance Programme was established to provide loans for investment in future technologies.

The Business, Innovation and Skills Select Committee described the programme as a "wasted opportunity".

The Department for Business said it was working with 10 firms to fund projects worth about £2bn through the scheme.

"It is important to understand that the AAP is about long-term investment projects, rather than short-term rescue," said a spokesman.

"We have to work at the pace demanded by the companies and also have to consider the best interests of the taxpayer."

The assistance programme was set up to help car firms with manufacturing facilities within the UK and major car parts suppliers.

Scrappage boost

Its critics have said it is too inflexible.

"When it was announced, AAP represented a genuine opportunity to help the automotive industry," said Peter Luff, chairman of the MPs' committee.

"But it is now December and not a single loan or loan guarantee has been made.

"It is up to the government to prove us wrong, but they must ensure that funds are released to companies very quickly."

While no AAP funds have been released, UK car sales have recovered since the summer, helped by the government's scrappage scheme.

The £400m initiative gives consumers £2,000 off the price of a new car if they trade in a vehicle that is at least 10 years old.

It was launched in May and is due to end in February 2010 at the latest.

The latest industry figures showed that UK car sales rose by 57.6% in November compared with a year earlier.