Did Government know of closure plan before agreeing Ford cash deal? (From Daily Echo)

Did Government know of closure plan before agreeing Ford cash deal?

8:06am Friday 26th October 2012 in News Exclusive By Echo Reporters

THE Daily Echo can reveal today that Ford was approved a Government handout – less than a week before yesterday’s shock closure announcement.

The taxpayer-funded grant, aimed at creating jobs in Essex, was rubber-stamped on Friday.

Last night pressure mounted on the Department for Business, Innovation and Skills (BIS) to reveal whether the Government had been aware about the bombshell job news when it signed off the cash.

A BIS spokeswoman said the low carbon diesel engine was a separate project judged on its own merits, saying the Government would “not give a running commentary” on talks with the company.

Asked about the timing of the Regional Growth Fund award and the closure of the Southampton plant, she said: “They are entirely separate things.”

But Southampton Itchen MP John Denham said: “It would be appalling if BIS agreed to give this money to Ford without being told by Ford of the job losses that were coming down the line.

"If they did know about the job losses they should have negotiated for a better outcome.

“The idea that this is a separate project is just not the right way to look at it.”

He added: “I would have expected the Government to have demanded knowledge of Ford’s plans before they agreed to give them money.

“I think it’s fine and right that Governments should work with companies to invest in new technologies, but first they should sit down and say ‘what is your strategy for this country?’”

Last night Mark Hoban, the Employment Minister and MP for Fareham, said: “I was not aware of these plans.”

He is not in the same department as Business Secretary Vince Cable, who unveiled last Friday’s investment.

The award could still be withdrawn, as it is still subject to due diligence, and the company does not yet have access to the cash.

The size of the proposed grant, under the £2.4 billion Regional Growth Fund, is confidential.

The fund is aimed at job creation and companies are invited to bid for targeted grants for specific projects.

Business leaders in Hampshire have previously criticised the way it is run, saying it favours the north of England over the south east.

Dr Cable admitted yesterday’s news would be “very disappointing” for the workers at Southampton, but insisted: “Ford has today underlined its continued long-term commitment to its core activities in the UK and its £1.5 billion programme of investment in advanced manufacturing, engineering and research and development until 2015.

“And the company has today announced that production of the new low-carbon diesel engine will start in 2015/16 which is being designed and engineered at Dunton and built at Dagenham.

"This is good news and underlines Ford’s commitment for the long-term. Ford has applied for money from round three of the Government’s Regional Growth Fund to enable this project to go ahead and we were pleased last Friday to announce support for this going forward.”