UK Car Lending

UK government scheme that protected millions of jobs with £38bn support for businesses closes today

  • The Covid Business Finance Facility, which offered a quick and cost-effective way to raise working capital for large companies, is coming to an end, with every penny paid back.
  • The Bank of England facility has provided almost £38billion of support to more than 100 of the UK‘s biggest businesses and delivered a profit for the taxpayer while protecting millions of jobs.
  • Businesses that employ nearly 2.5 million people have been directly supported, including those in the automotive industry, travel, hospitality and department stores.

Household names, such as Gatwick Airport, the Football Association and the National Trust, were among more than 100 of the UK’s biggest employers to benefit from the Covid Corporate Financing Facility (CCFF). The scheme has recouped every penny lent – ​​plus a profit of over £60m.

Rishi Sunak said the Bank of England-administered scheme, which launched in March 2020 at the start of the pandemic, was another example of the government delivering support at unprecedented speed to simultaneously protect millions of jobs and taxpayers’ money.

Chancellor Rishi Sunak said:

We have not only taken unprecedented action, but we have done so with unprecedented speed to protect jobs and businesses throughout the pandemic.

The CCFF scheme has enabled many of the UK’s largest employers to continue to pay wages and suppliers, protecting millions of jobs – and on top of that, every penny has been paid back.

The final CCFF refunds were made today, with all companies paying back what they owed. The scheme made a profit of over £60million for the taxpayer as the interest rate on cash provided by the Bank of England was set at pre-Covid market comparable rates. The companies therefore repaid a slightly higher amount at maturity than the financing they had borrowed initially.

Peter Vermeulen, Chief Financial Officer of the National Trust, said:

The HM Treasury team did an incredible job at the height of the pandemic. The National Trust, like many other large organisations, has experienced an unprecedented cash crunch, accompanied by huge levels of uncertainty about the future.

The CCFF was set up quickly and very transparently. The HM Treasury team issued clear guidelines and worked tirelessly to support us with the application and the associated legalities.

We cannot congratulate the team enough for the excellent work they have done. It was an essential lifeline for the National Trust and saved some of the essential work we do on cultural and natural heritage, for the Nation. Thank you.

Mark Burrows, Chief Operating Officer of The Football Association, said:

The pandemic has been a serious challenge for the FA. We faced huge losses from canceled events and competitive disruptions affecting our broadcast rights.

As a not-for-profit organization that reinvests its surplus into grassroots football, being able to rely on the security of CCFF as a quick and cost-effective way to raise working capital has allowed us to not only continue to support our business, but grassroots football across the country.

Through the purchase of short-term debt securities – known as commercial paper – CCFF provided a quick and cost-effective means of raising working capital for businesses that were fundamentally sound but were at risk of severe disruption. cash flow. Because it lent directly to large corporations, the program also gave banks the space to lend to a broader population of businesses that might otherwise have failed during the pandemic.

The program has helped businesses in a variety of industries, including automotive, travel, hospitality and department stores. He maintained cash and delivered on the government’s commitment to do everything it could to support the economy and protect jobs.

More information

  • UKGI, as the Government’s center of excellence in corporate finance and corporate governance, has set up the Covid Intervention Resolution Group (CIRG) to support the Chancellor in his lending decisions as part of the process of access exam introduced in October 2020, and to monitor the loan portfolio through to maturity.
  • The CCFF was part of an unprecedented package of support for businesses throughout the pandemic, including VAT cuts, holidays on business rates and government guaranteed loans worth around 400 billion of pounds sterling.

New reaction from stakeholders

Stewart Wingate, General Manager of Gatwick Airport, said:

The CCFF loan provided valuable support to the airport during the COVID-19 pandemic and helped ensure we could stay open and maintain our role as an essential part of the national infrastructure. This has allowed us to maintain flights for essential travel and cargo, including medical equipment and other vital supplies during the pandemic.

Richard Hutton, Chief Financial Officer at Greggs, said:

In the spring of 2020, timely access to CCFF was crucial for Greggs as we sought to protect our employees and others who depended on us at the start of the pandemic. This gave us essential respite while alternative commercial facilities were developed.

The quick response of the HMT and Bank of England teams was key to ensuring stability at a critical time.

Neil Martin, Managing Director Europe, Lendlease, said:

This facility has helped our business emerge from the pandemic in a strong position to be able to meet the needs of our customers, customers and communities in the UK, we have been very grateful for the support.

The London School of Economics said:

COVID has been a financial challenge for LSE as for all UK universities. Throughout, our priorities have been to protect the education and experience we provide for our students, as well as our staff and research capabilities. Combined with other credit facilities and reserves, the Bank of England’s CCFF has been instrumental in achieving these priorities.

Martin Watts, Director of Treasury at L&Q said:

The funds have helped us protect jobs, maintain vital services for residents and continue our development agenda. With the support of the Bank of England, we delivered over 5,500 new homes between April 1, 2020 and December 31, 2021, of which 3,200 were affordable.

Using this program meant that our balance sheet was well capitalized, allowing us to provide further reassurance to key stakeholders in line with our prudent approach to risk management.