Vince Cable’s flagship schemes to reinvigorate flagging SME finance are forecast to fall well short of their targets.
The schemes, the British Business Bank, the Green Investment Bank and the Export Finance Scheme were forecast to provide £2bn to UK businesses in 2014-15. However just over a quarter of that sum will now be achieved with just £530m expected to be awarded by March 2015.
- The British Business Bank, forecast to increase its loans by £800m to small business is now expected to deliver just £200m
- The Green Investment Bank was forecast to write £1bn in new loans, against an expected achievement of just £200m
- UK Export Finance was forecast to create £200m of new credit but is now expected to deliver just £30m
The Office for Budget Responsibility (OBR) report places significant question marks over the figures and assurances provided by Cable and the Department of Business, Innovation & Skills (BIS).
Shadow Business Secretary, Chuka Umunna, seized on the OBT report claiming:
“It is deeply concerning that the OBR is expecting such a large shortfall in these programmes.
“These schemes are simply not doing the job they need to do for British business.”
Desperately scrabbling to avoid the latest white elephant tag for SME lending:
“The tendency for new schemes to take longer than originally planned to deliver the amounts targeted”
In addition the OBR admitted it had created an ‘underspend’ allowance in its latest forecasts of £300m for 2014-15 and for £1bn in 2015-16.
A BIS spokesperson said:
“The Business Bank, Green Investment Bank and UK Export Finance are providing significant volumes of lending to British businesses and are playing an important part in supporting growth, which the OBR has just revised up to 3% for next year.”