Vince Cable gives green light to £10m Group Lotus regional cash boost
- Credit: Archant Norfolk
Business secretary Vince Cable has given the green light to a £10m regional cash boost for Norfolk car maker Group Lotus in a sign of his confidence in the firm's future.
The government is set to announce details of a revised bid for Regional Growth Fund money from the Hethel-based luxury sports car business in the coming weeks.
The multi-million pound pot had been earmarked for a scheme by former Lotus boss Dany Bahar to create five new sports car models – a plan Lotus said would create at least 1,000 jobs at its headquarters and another 800 in the supply chain.
But the plan was scrapped following the sale of Lotus' parent company Proton and the dramatic departure of its chief executive last year.
Dr Cable told the EDP: 'We have now agreed the regional growth fund for Lotus. It was a few weeks ago that we finally signed off on it. There is a lot of detail still to grind through, but we have basically accepted the bid and approved it.'
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Lotus declined to comment last night, but it is understood the South Norfolk firm's new management team, which includes new boss Aslam Farikullah, has been in close talks with the government.
Dr Cable always maintained the regional growth fund money could be reactivated once the future of the car-maker became clear.
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The plan which has been given the nod by Dr Cable will still receive a similar sum to Mr Bahar's scheme, but the details will be revised.
Chris Starkie, managing director of the New Anglia Local Enterprise Partnership, said the news was a 'vote of confidence' in ensuring the stability and sustainability of the company and its new management team.'
He said: 'Negotiations have been taking place for some time in light of its decision to scrap its original five year business plan on which the original regional growth fund bid was based. It is an important psychological boost for the company at an important time in its history.'
South Norfolk Richard Bacon, who raised concerns about the future of Group Lotus in a debate in the House of Commons last year, also welcomed the news.
He said: 'It is an important step. It is a major employer in my constituency and I am very pleased they have been able to reach and agreement with the government to do this and it will help safeguard jobs in the area.'
Dr Cable said yesterday that the regional growth fund scheme was both a good intervention and popular scheme.
He said: 'We are committed to this. The one thing that is really good about this and different to the RDAs (regional development agencies) is that you get a very good multiplier from private sector investment. We reckon, based on the projects we have agreed to, that you are getting something in the order of £1bn government funding producing £6bn of private investment. That kind of ratio is across the board. He added that the RGF was throwing up some 'good models' in promoting local development from co-financing with big companies doing innovative things that they wouldn't otherwise do in the UK.
'The car industry has benefited particularly,' he added.