£10m rescue plan helps just five firms

THE Government has been accused of "grabbing headlines" rather than helping families and businesses in the recession after figures revealed multi-million pound rescue schemes have had limited impact in the region, writes the WMN's Graeme Demianyk and Catherine Barnes.

A parliamentary question revealed only five businesses in Devon and Cornwall had received much-needed loans from a pot of £10 million of taxpayers' money earmarked for South West firms.

Julia Goldsworthy, Liberal Democrat MP for Falmouth and Camborne, who tabled the question, said there was a "depressingly familiar theme to the Government's approach to dealing with the economic downturn".

She added: "Making an announcement to great fanfare seems to be more important to them than delivering results on the ground."

Meanwhile, the flagship Mortgage Rescue Scheme, which the Government hoped would allow hard-pressed homeowners to sell part or all of their home and rent it back again, has been taken up by just two families in the wider South West, statistics revealed yesterday.

The £10 million Small Business Loan Fund, devised by the South West Regional Development Agency, has lent money to nine businesses since its launch in April, including three in Cornwall and two in Devon.

Ms Goldsworthy's criticism stems from the fund's perceived lack of urgency and that the £5 million earmarked for small firms from Cornwall and the Isles of Scilly has not been filtering through.

SWRDA, which has dropped £3.75 million into the pot and receives its funding from different Government departments, defended the fund administered from Truro.

Spokesman Billy McKenna said: "It's disappointing to be criticised for what's an innovative scheme, presenting real help to businesses in the region."

Mr McKenna said that funding was not merely a question of handing over significant sums of money upon request.

It had received more than 270 inquiries from businesses in need of help, with more than 80 applications currently in process.

He added: "This is taxpayers' money and we needed a processing system in place, which took a bit of time. We are processing applications, ensuring that we are helping businesses that apply for the funding.

"We are addressing a market failure and lending funds that are not otherwise getting through to small businesses."

Ms Goldsworthy's criticism followed a stinging attack on Labour's attempts to mitigate the effects of the recession by Conservative Party leader David Cameron at Prime Minister's Questions on Wednesday afternoon.

Mr Cameron said: "What about the capital for enterprise fund? It was meant to transform British businesses. How many has it helped? Just five.

"What about the asset-backed securities guarantee? How many assets has it backed? None – zero."

Prime Minister Gordon Brown responded by saying that the Opposition was yet to state whether it opposed the measures.

He added that the Mortgage Rescue Scheme "has not had a lot of people on it" because it was "the fallback option" and that struggling homeowners had been helped "in other ways".