[UPDATE 5th October 2012. The scheme has still not been launched. In the Dail this week, Minister Bruton was questioned by Fianna Fail’s Dara Calleary and by Sinn Fein’s Dessie Ellis and his response was that the scheme launch was “imminent”]
If you read the recent IMF “Selected Issues” report on Ireland published on 10th September 2012, you might have been surprised to see reference to a “partial loan credit guarantee scheme” launched in Ireland in August 2012. The reference is on page 25 of the report in a section which examines similar loan guarantee schemes for small and medium enterprises (SMEs) in the UK, US and elsewhere. The UK scheme in particular has been very successful, launched in March 2012, by June it had seen 10,000 loans with a value of GBP 1.5bn guaranteed – that’s GBP 1.5bn transmitted to wealth and employment producing domestic companies in the space of just three months.
In Ireland we have been talking about a loan guarantee scheme for SMEs for nearly a year, but as yet, despite the IMF thinking it has been launched and despite the evidence in other countries of the benefit of such a scheme, we appear to be still sitting on our hands as SMEs, who now regard availability of finance as just as critical as having customers, still go to the wall.
The scheme was announced in Budget 2012 in December 2011, in April 2012 Minister for Jobs, Innovation and Enterprise Richard Bruton launched the Bill to give effect to the scheme and the Act giving effect to it was passed into law in July 2012. But where is the scheme?
This week in the Dail, the Sinn Fein finance spokesperson Pearse Doherty asked Minister Bruton about the scheme which the IMF believed had been launched. He also asked about the company administering the scheme, our old friends Capita, which Minister Bruton correctly states is based in Maynooth but it is part of the UK’s Capita group which has a highly colourful history in the UK where it has been dubbed “Crapita” by satirical current affairs magazine Private Eye. Capita is to receive €199,000 a year for administering the scheme – judging by the patchy performance of the Capita group, let’s hope that more than €199,000 is actually advanced to SMEs!
The full exchange is below:
Deputy Pearse Doherty: To ask the Minister for Jobs, Enterprise and Innovation in relation to the temporary partial credit guarantee scheme which he announced in April 2012, the actual launch date of the scheme; the number of applications received to date under the scheme; and the total value of loans advanced under the scheme..
Deputy Pearse Doherty: To ask the Minister for Jobs, Enterprise and Innovation in relation to the temporary partial credit guarantee scheme if he will provide an overview of marketing initiatives undertaken to notify and inform the target audience about the scheme.
Deputy Pearse Doherty:To ask the Minister for Jobs, Enterprise and Innovation in relation to the temporary partial credit guarantee scheme the expected annual value of the contract with a company (details supplied) for the oversight, management and operation of the scheme; and in relation to the tendering process and appointment of the company, the total number of tenders submitted..
Minister for Jobs, Enterprise and Innovation, Richard Bruton: I propose taking questions 168, 169 and 170 together.
As the Deputy will be aware, the Credit Guarantee Act 2012 was passed by both Houses of the Oireachtas and signed into law by the President in July 2012. The Act was commenced and came into operation on 30 August 2012. I have now made, with the consent of my colleagues the Minister for Finance and the Minister for Public Expenditure and Reform a scheme under section 5 of the Act and officials in my Department are working on the final arrangements to launch the scheme. The scheme launch is imminent.
Regarding the cost of the operator, I announced last April that the contract for the practical oversight, management and operation of the scheme was awarded to Maynooth-based company Capita Asset Services following a competitive tendering process. It is expected that the annual cost under the contract will be €199,000.
NAMA Wine Lake 