The coalition government was today urged to think again about securing financial support for Sheffield Forgemasters after a committee of backbench MPs said the decision to scrap an £80m loan meant an opportunity to take a lead in the civil nuclear power industry could be lost.
In a report critical of the way Vince Cable, the business secretary, decided to axe the financial support agreed by his predecessor Lord Mandelson in the dying days of Gordon Brown's administration, the business innovation and skills committee said Sheffield Forgemasters had been identified as an ‘easy’ target.
The MPs said they recognised the need for Cable to save money as part of the £6bn cut in public spending demanded by the chancellor, George Osborne, for the current financial year and that the spotlight inevitably fell on those projects to which the government was not contractually committed. These included the loan to Sheffield Forgemasters to develop a 15,000-tonne press to make large components for the civil nuclear industry.
"A choice could therefore have been made by ministers on where the axe would fall," today's report said. "We do not believe that any substantial cost-benefit analysis was undertaken on those non-contractually committed projects under review.
"Rather it appears to be the case that the Sheffield Forgemasters loan was identified as an easy cost saving. While this is a legitimate way to proceed, the department should have been more transparent in articulating this process and not hidden behind the simple defence of affordability. Furthermore, we did not receive any detailed explanation of how the Sheffield Forgemasters project was chosen ahead of the other non-contractually committed projects sponsored by the department."
The report added: "The establishment of such a large press would have enabled the UK to take a significant lead in this important industry. For that reason we urge the government to continue in its efforts to secure funding for this project – whether by public or private funds – so that an opportunity take a lead in this important industry is not lost.
"Therefore, we welcome the undertaking given to us by the secretary of state [Cable] that he would 'entertain' a fresh loan application from Sheffield Forgemasters. Should the company make a further application, we would expect the secretary of state to honour that undertaking."
The Guardian
