Public funding row bus firm Alexander Dennis may get more

The Herald Scotland

a day ago

The development comes amidst a public funding row which saw ADL receive tens of millions from the public purse even after it embarked on a plan to axe a third of its Scottish workforce five years ago.
ADL has been warned by the Scottish Government that some of the millions could be subject to clawback if goes ahead with the move to England.
The Scottish Government's Scottish Enterprise agency has said in a briefing from July 18 that in its most recent review in December, "no risks had been identified that would preclude continued funding".
Scottish Enterprise says that that a joint UK working group involving themselves and the UK and Scottish governments are identifying solutions that they say "support continued investment and employment at ADL's Scottish sites".
It has said that no funding has been paid out since the company announcement but that any support was subject to "rigorous monitoring and safeguarding measures".
Scottish Enterprise chief executive Adrian Gillespie said: "We will continue to work closely with all partners to explore all avenues to retain jobs and secure long-term investment".
Alba Party leader Kenny MacAskill said all further [[pub]]lic funding of ADL should cease unless there is a commitment to remain in Scotland and that millions should be clawed back if ADL departed.
Last month, Alexander Dennis began consultations on a plan to close its Falkirk operations and cease manufacturing at its Larbert base with the loss of 400 on site jobs.
Manufacturing would be centralised at its Scarborough operation which has the capacity to produce around 1,200 buses a year.
The agency analysis came in response to a group of MSPs seeking a clear outline of the actions Scottish Enterprise is taking now, in coordination with the Scottish Government and other partners, to support continued manufacturing and investment at the Scottish sites.
Unite Scotland estimates that up to 1,600 jobs could be at risk when supply chain roles are included and has warned of a 'devastating' impact on communities already reeling from the Grangemouth oil refinery closure.
Ministers have confirmed that should Alexander Dennis go ahead with exiting Scotland, the financial assistance paid may be subject to "clawback". They have said that it will be down to Scottish Enterprise to decide on how to proceed.
Kenny MacAskill According to Scottish Government records, ADL received £58m of public 'subsidy' for green vehicles since 2020 under two schemes aimed at transitioning Scotland to green buses - despite the company having embarked on a 2020 plan to axe a third of its Scottish workforce.
And some £30m of jobs grants for research and development over 10 years has come from the Scottish Government's economic development agency Scottish Enterprise.
Some £11.2m of those jobs grants from Scottish Enterprise came in 2023, three years after concerns were raised over ADL embarking on major job cuts.
By the time the 2020 jobs cut was in place, ADL had already received over £8m in 'job securing' taxpayer funding which was promoted as supporting building a new greener business in Scotland.
The Herald revealed that ADL warned the First Minister it was "'reconsidering' its 'entire investment' in Scotland — a year before announcing plans to relocate to England. He was also told they had already been 'forced' to offshore certain manufacturing functions to China.
The First Minister intervened after learning of potential redundancies at the firm, suggesting 'further capital support' and advising Scottish Enterprise to 'exhaust all options to support the business'.
Finance secretary Shona Robison has said that Scottish Enterprise "is continuing to work closely with ADL to try to find a positive solution".
ADL has allowed an extra fortnight for efforts to save the jobs of workers in Falkirk and Larbert. A deadline for a consultation is now set for August 15.
SNP's Alex Salmond and Nicola Sturgeon once set out the economic case for Scottish Independence from an Alexander Dennis depot (Image: Newsquest) Mr MacAskill, who said the job losses were "unacceptable", said ADL "must be held to account if they choose to relocate south of the border".
And he said any further financial support given must contain firm guarantees that ADL is staying in Scotland and that funds can be recouped if there is any change of mind.
He said: "Falkirk and Larbert have served them well over the years and Scottish Governments and agencies have supported them handsomely. Closure is bad enough but relocation rubs salt into the wound.
"Any funds that can be clawed back absolutely must be. The workers community and Scotland deserve no less.
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"Workers are entitled to loyalty from their governments as well as their employers. Public funds are for public good."
Ministers have said they are working with bus operators to drum up interest for much-needed orders for ADL.
The company has previously said that it would need to see a significant rise in bus orders – between 70 and 100 by the end of the year and 300-400 next year – to remain open.
In a briefing, Scottish Enterprise chief executive Adrian Gillespie said that it remained "fully committed to supporting ADL and safeguarding Scotland's strategic manufacturing capabilities".
He added: "We will continue to work closely with all partners to explore all avenues to retain jobs and secure long-term investment."
Adrian Gillespie (Image: SE) The agency has said that past funding typically include obligations such as job creation or retention, matched funding from the company involved.
And while it said that while the specific terms agreed with ADL are "commercially sensitive" it "rigorously monitors all funded projects to "ensure compliance and value for public investment".
"Monitoring includes regular reporting on technical progress, milestone achievements, and any deviations from the original project plan. Risks are assessed prior to each payment," said Mr Gillespie.
"As of the most recent review, no risks had been identified that would preclude continued funding. Scottish Enterprise's grant conditions include key safeguards and the option to claw back funding."
He added that "we remain fully committed to supporting ADL and safeguarding Scotland's strategic manufacturing capabilities.
"Scottish Enterprise is working closely with ADL, the Scottish Government, and UK partners to exploit all viable options to retain ADL operations and employment in Scotland."
Ministers say there is a commitment from ADL to consider keeping chassis manufacture as well as the possibility of single deck bus manufacture in Scotland.
And they say action is being taken to liaise with commercial bus operators and local transport authorities to establish the current demand for double deck buses in Scotland and were working alongside the UK Government to identify demand in other parts of the UK.
But there remains concerns that UK subsidy rules which has curbed [[Scottish Government]] action in providing a direct contract award to its own Inverclyde shipyard firm Ferguson Marine is hindering attempts to give [[pub]]licly funded support for ADL to try and keep the company in Scotland.
But Ms Robison has said it was for the UK Government to make any changes to the Subsidy Control Act which might benefit Scottish businesses.
She has told MSPs that the government was committed to looking at "all viable options" and are working with private bus companies.
'I agree about the importance of securing a short-term pipeline of orders,' she said.
'Please be assured that we are therefore liaising with commercial bus operators and local transport authorities to establish the current demand for double-deck buses in Scotland and are working alongside UK Government to identify demand in other parts of the UK," she said in a briefing.
'I am in full agreement with you about the importance of Alexander Dennis to Scotland and of retaining the jobs of the highly-skilled workers.
'That is why we are continuing to work at pace with Scottish Enterprise and UK Government, and alongside the company and trade unions, to explore all viable options to support ADL to retain bus manufacturing in Scotland.'
Kate Forbes (Image: Colin Mearns) Deputy first minister Kate Forbes said: 'Our absolute focus continues to be on exploring all viable options to support Alexander Dennis Ltd, its workforce and the families and communities they support.
'The [[Scottish Government]] continues to work in close collaboration with the company, trade unions, Scottish Enterprise, Transport Scotland and the [[UK Government]] during the consultation period.
'This work includes discussions on potential support for a company furlough scheme and urgently examining options to provide greater confidence regarding short-term demand for bus manufacturing in Scotland. "