No furlough compensation for Alexander Dennis after conditions not met

The Scottish government has not paid any of its promised £4.1m furlough package to Alexander Dennis after the firm failed to met agreed conditions.

The bus manufacturing company had previously set out plans to close its facilities in Falkirk and Larbert, with the loss of 400 jobs, and move production to Yorkshire.

First Minister John Swinney confirmed financial support last September, which needed "evidence of sufficient orders to sustain its operations in Scotland", and the company said it would keep its Scottish sites open.

However, six months later, Alexander Dennis proposed to close its Falkirk plant with the potential loss of 115 jobs.

Transport Secretary Stephen Flynn said the company's failure to meet the terms was "deeply disappointing" and it was informed of the Scottish government's decision in June.

He said the pledged support depended on the firm securing a minimum number of orders and bus manufacturing jobs in Scotland.

Flynn added: "The Scottish government and Scottish Enterprise are continuing constructive discussions with the company as part of engagement to protect jobs and keep skilled manufacturing in Scotland."

Alexander Dennis said it had made changes to the closure plans to retain as many jobs as possible, and had suffered financially due to increased competition from electric bus manufacturers in China.

The firm's renewed plans to close the Falkirk facility and convert its Larbert manufacturing facility to a chassis manufacturing site were announced in March.

Chassis manufacturing is the process of building the frame of a vehicle.

The company said this would safeguard about 200 skilled manufacturing and support jobs which were previously at risk of redundancy, but that 115 posts would be lost.

A spokesman said: "We are deeply disappointed that the company has been left to absorb the full cost of the furlough scheme after expected financial support from Scottish government failed to materialise.

"Faced with difficult choices, we acted to safeguard highly skilled manufacturing jobs at Larbert and protect the future of bus manufacturing in Scotland by converting our Larbert facility to focus on chassis assembly.

"Those changes have now been implemented at considerable cost to the company, on top of the full cost of furlough."

The spokesman said the firm had missed out on government funding for electric buses, claiming the majority of taxpayer-funded buses were being built in China instead of Scotland, which undermined the case for continuing bus manufacturing in Larbert.

"Importantly, we have retained the capability to return to full bus body assembly at Larbert should future demand support it," he added.

"That will require a much stronger commitment from both the Scottish and UK governments if it is to happen."