Train to Gain
57. The Government increased its funding of Train
to Gain by £350 million in October 2008 to support the training
needs of small and medium sized enterprises in the economic downturn,
such as by providing access to funding for qualifications in business
critical areas. The Learning and Skills Council provided £4.4million
to Business Link in the West Midlands to fund delivery of the
Train to Gain programme.[55]
In its written submission, Unite described the West Midlands as
the "the highest performing region in terms of Train to Gain
and through previous recessions and the collapse of MG Rover has
developed a number of initiatives to tackle unemployment and skills
retention."
58. Feedback to the Committee on the Train to Gain
scheme has been mixed. The Regional Manufacturing Director from
Ideal Standard stated that they are "training, typically,
300 people this year by NVQ 1 and NVQ 2 training, which is 100%
funded from the Government." The training is accelerated
from its training plan to take advantage of short time working.
It had reportedly been well received by employees with people
attending training in their own time.[56]
However, the British Ceramic Confederation stated that full funding
is not available for training above NVQ level 2 which could impact
on the retention of skilled staff.[57]
59. We note the popularity of the Train to Gain
scheme and recognise the commitment amongst employers in the region
to training. We also recognise the contribution of such schemes
to companies that might be forced into reducing the hours they
are operating on through the downturn, and to the general level
of skills in the workforce throughout the region that will benefit
the region in the future. We think this is something that the
Government should encourage at all levels. We recommend that funding
for the Train to Gain scheme is continued as long as there is
demand, and that the Regional Minister works to ensure the delivery
of the scheme in the region is not hampered by the break up of
the Learning and Skills Council.
Support for automotive manufacturing
60. A vehicle scrappage scheme was announced in the
2009 budget and has been in operation since 18 May 2009. It is
a voluntary discount scheme for motor manufacturers who will give
motorists £2,000 or more to replace a car or van that is
over 10 years old with a new vehicle. The Government co-funds
the discount with industry, offering £1,000 per scrapped
vehicle up to a total subsidy of £300 million. The Department
for Business, Innovation and Skills stated that 35,000 orders
for new vehicles had resulted from the scheme by the end of May
and 38 car manufacturers are participating in it.[58]
The Minister told us that this equated to about 4,000 orders in
the West Midlands region.[59]
In their oral evidence to the Committee on 11 May, a representative
from the automotive sector expressed concern that the scheme had
not been restricted to cars manufactured in the UK. However,
this would not have been compatible with EU rules.
61. A similar scheme operating in Germany increased
registrations by 21.5% in February. In Germany, drivers receive
€2,500 (£2,245) for trading in a car that is more than
nine years old. The German Government is investing €5 billion
(£4.5 billion) in their scheme; this is significantly larger
than the UK Government's maximum investment of £300 million
in a vehicle scrappage scheme.
62. The Government announced the launch of an Automotive
Assistance Programme of £2.7 billion in January 2009. The
programme provides loans and Government guarantees to businesses
in the automotive sector, including the supply chain, with sales
in excess of £25million with planned project investment in
excess of £5million. Projects must meet the European Investment
Bank's Clean Transport Facility criteria and require a Government
guarantee; meet the Government's carbon, environmental or efficiency
targets; or bring value to the UK through the retention of jobs
or technologies. In evidence to the BERR Select Committee the
automotive sector confirmed that the programme was structured
as they would like it:
"When we set out the package of measures that
we were looking for in October/November time of last year, loans
and loan guarantees were absolutely what we were looking for.
The industry has always sought the ability to help itself through
this difficult situation and for us the problems were getting
access to credit and finance to allow us to sustain our businesses."[60]
However, they were frustrated at the delays in implementing
the scheme.
63. We asked the Regional Minister how much of the
Automotive Assistance Programme had filtered through to the region.
The Minister said that none had yet been drawn down, but that
there were five applications from firms in the West Midlands,
out of a total of eighteen nationally, that were being considered.
He said that he shared the feeling that "we would all like
these schemes to be operating as quickly as possible". Mr
Jackson from the Department for Business explained that the package
is long-term investment, and involves the added dimensions of
green technology and innovation, so it is taking some manufacturers
and suppliers time to work up the business case.[61]
He said the Department was working with all the firms who had
expressed an interest, and trying to ensure things are progressing
as quickly as possible. When asked if the money might appear before
the end of the year, Mr Jackson said, "I expect so."[62]
He also mentioned that the five applications were at an advanced
stage, and there were a further 80 expressions of interest in
the pipeline.
64. We welcome the support provided in the Automotive
Assistance Scheme, but are dismayed to find that none of the funding
has reached business in the West Midlands. We recognise that the
programme is for long term investment but the process of applying
and receiving funds should be as swift as practicable. We recommend
that the Regional Minister does all that he can to accelerate
the AAP application process, and to provide support to those firms
that have submitted an application or an expression of interest.
HMRC
65. The Pre-Budget report announced that HMRC had
introduced a new, dedicated Business Support Service designed
to meet the needs of businesses affected by the current economic
conditions. The service provides specific help where customers
are worried about being able to pay tax, National Insurance, VAT
or other payments owed to HM Revenue & Customs. In their oral
evidence the Federation of Small Businesses said "The flexibility
of the Inland Revenue to allow you to spread rates has been welcomed
and is worth while … allowing people to spread payments".[63]
66. Trudi Elliot from the Government Office said
that at the last Task Force meeting the business representatives
were asked what had been the most successful initiative and they
said the HMRC Business Support Scheme. The experience of the MG
Rover task force had again proved useful in understand what business
needed during an economic shock. HMRC could anticipate what the
likely needs of the business community were going to be, and they
had so far come to agreements with 13,350 businesses in the region.[64]
67. Richard Hutchins, from Advantage West Midlands,
raised the additional point that not only did an executive from
HMRC sit on the task force, but they were the same person that
did so during the MG Rover crisis, and their experience had proved
to be tremendously helpful. He said that there was some concern
about what happens when the bills have to be paid eventually,
but that AWM were exploring ways to manage the flow of cash out
of these businesses as they repay HMRC for these deferred payments.[65]
68. The relationship between HMRC and the taskforce
demonstrates once again the benefits of the experience of MG Rover
and the importance of retaining knowledge of how to deal with
economic shocks. We welcome the positive contribution of the HMRC
Business Payment Scheme, and the effect it has had on helping
businesses in the region manage their cash flow during the downturn.
We note that these are payments deferred and recognise that AWM
is working with businesses and the banks to anticipate any future
problems.
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