It is “deeply disappointing” that no payment can be made under a Scottish Government furlough scheme set up to try to help workers at the bus manufacturer Alexander Dennis, Economy Secretary Stephen Flynn has said.
However he added that as the conditions of the scheme had not been met by the company it was “right and proper” that no payment be made.
The announcement in Holyrood came 12 months after First Minister John Swinney claimed the future of company’s plant in Falkirk had been “secured” thanks to a £4 million furlough scheme.
However in March this year Alexander Dennis announced plans to close the site, with a consultation on converting its nearby facility in Larbert to chassis manufacturing.
Mr Flynn said the company, which was Scotland’s only bus manufacturer, had failed to meet the conditions set out in the furlough scheme – which included having “contracted orders for buses to be built in Scotland”.
As such he told MSPs that “the Scottish Government is not able to make payment to Alexander Dennis”.
He added that under the terms of the deal Alexander Dennis had accepted there must be evidence of “contracts and continued bus building in Scotland before any payment from the Scottish Government could be made”.
Mr Flynn said while the furlough scheme had been “truly innovative and exceptional” the conditions, which had been agreed with the company had not been met – describing that as “deeply disappointing”.
Alexander Dennis feel like they have been hung out to dry by this Government, they expected at least some of the furlough money
The Economy Secretary continued: “Since the furlough grant was offered, however, the company has changed its plans and is now pursuing a different option based on all bus production taking place at Scarborough and chassis production work being brought in-house at Larbert.”
But Reform’s Graham Simpson said: “Alexander Dennis feel like they have been hung out to dry by this Government, they expected at least some of the furlough money, but instead have had to heavily invest in turning Larbert into a chassis making centre.
“And all the while tax payers money is being used to buy buses from China.”
Mr Simpson accused the Scottish Government of “shifting the goalposts” on its ScotZEB scheme – set up to encourage greater use of zero emission buses – that had “forced Alexander Dennis to pursue a different outcome”.
The Reform MSP said: “Had the reopened ScotZEB 2 process delivered the volume of buses in the timescale expected, the terms of the furlough scheme would have been met.”
Meanwhile Conservative MSP Stephen Kerr insisted the furlough offer had been “another SNP election special con designed to win votes, not save jobs”.
The Tory said: “The SNP paraded their furlough scheme as if it had saved hundreds of skilled jobs, yet workers are still facing an uncertain future and no credible long-term plan has been secured.”
He added that the Economy Secretary had only come to Holyrood to make a statement “because I forced the issue through a written question”.