FORGEMASTERS could still get the £80 million loan axed controversially by the coalition Government, it has been revealed.
Sources close to the Government say the Brightside company would be well-placed to be granted the loan through the £1.5 billion Future Jobs Fund - and it could make an application as early as the end of the month to be in line for a share of the first round of funding.
The money is being handed out through new Local Enterprise Partnerships - mini development agencies covering individual cities and surrounding areas, one of which has been set up for Sheffield and South Yorkshire.
Forgemasters proposed to use the cash to develop a 15,000 tonne forging press to manufacture components for the nuclear industry.
However, because Forge-masters said it would need to make a new business case requiring “considerable, comprehensive work”, an application may be made during a later round.
The Government is keen to bolster support for Nick Clegg and the Liberal Democrats, whose deep unpopularity over student loans and Forgemasters is seen by some as undermining the coalition.
News of a possible solution to the Forgemasters controversy would be a massive relief to the Deputy Prime Minister, who is anxious to start mending his and his party’s shattered image in Sheffield.
It follows the announcement that the Government will review its decision to pull the original funding, pledged by Labour business secretary Lord Mandelson before the 2010 General Election.
Dr Graham Honeyman, chief executive at Sheffield Forgemasters, said: “The company welcomes recent comments by ministers acknowledging the Government’s intention to review the 15,000 tonne press funding project with us again during the first half of 2011 and to do so in a supportive way.
“Since the decision to overturn the loan we have been concentrating on accelerating the development of our group companies focusing on growth areas including business development based around our 10,000 tonne and 4,000 tonne forging presses, new machine shop and the opportunities within civil nuclear and other sectors.”
He added: “We look forward to working closely with the Government to seek avenues forward on the funding issue, however the detailed business environment regarding the 15,000 tonne press has changed substantially since the project was first conceived almost three years ago and considerable, comprehensive work will have to be repeated before a new application can be made.
“This work will cover all relevant issues including supply, market demand, hardware costs, availability and the UK’s own development of a civil nuclear power programme.” The news was welcomed by Sheffield Council’s Lib Dem leader, Coun Paul Scriven, whose party no longer has a majority at the Town Hall and could lose control to Labour in May with the opposition party’s vote expected to be boosted by people angry with the coalition’s cuts.
Coun Scriven said: “I’m really pleased that the coalition Government made available the Regional Growth Fund to help areas such as Sheffield and South Yorkshire, and I’m very pleased that Forgemasters, if they make a commercial decision to go ahead with the nuclear components press, will be a prime candidate for help.
“What this shows is that the coalition Government is prepared to work in Sheffield’s interests and as a LEP board member for the city, I’d be delighted to see the board support an application by Forgemasters.”