Support scheme for firms falls flat under Con-Dems

Smaller construction companies have been struggling as the Con-Dem demolition ball continues to smash into the industry - and with projects stalled, cash problems have gone crazy.

London accounting firm Wilkins Kennedy said that money from the enterprise finance guarantee scheme fell by 86 per cent to £3.5 million in the three months to June in comparison with the same period three years ago.

When the scheme was set up by the Labour government it started off well, but when the Con-Dems came to power it began to peter out and has now dwindled to almost nothing.

Its aim was to guarantee loans under additional lending to viable small and medium-sized enterprises lacking adequate security or proven track records.

Nick Parrett of Wilkins Kennedy said: "In 2011 alone, over 3,500 construction companies went bust.

"Problems with funding and the financial stability of small suppliers hit the entire supply chain and have led to many building projects stalling.

"A lot of jobs have disappeared or are at risk. These figures show the scheme is now essentially meaningless for getting funding to small businesses in the construction sector."

Construction union Ucatt general secretary Steve Murphy added: "The government cuts choked off the initial recovery in the industry and have dragged it back into recession.

"Now it seems that even promised limited assistance to smaller construction companies is also non-existent."