Only one in 100 firms have used government scheme
The Construction Products Association (CPA) said that only one in 100 firms had used the government’s £5bn credit insurance scheme and even that firm had found it "very expensive with very limited cover", papers report.
"We fought hard to persuade the Government to introduce a top-up scheme, but it is clear that by the time this was announced in the April Budget, much of the damage had already been done," said Michael Ankers, the CPA's chief executive.
"It is clear from this survey that the scope and cost of the scheme has made it unattractive to all but a few companies," he said. "Unless the Government is prepared to extend the scheme beyond the end of the year, any changes are unlikely to have any real, beneficial impact."
Credit insurers agree on low take up
Leading credit insurers said that take up of the scheme remained low. "No, we aren't getting many enquiries about the top-up scheme," said one reported in The Independent. "The feedback we are getting is that it is simply too pricey for most."
Industry needs reform from Whitehall
The Guardian claimed senior Whitehall insiders are aware of the scheme's flaws, but insist that they cannot be expected to underwrite firms' full potential losses.
“They say the credit insurance industry must be radically reformed to ensure that businesses are not left in the lurch. With potential losses of up to £300bn, and just £50m of premium income, the government believes the insurers' business model is fundamentally flawed,” the Guardian reports.
In meetings with business groups last Monday, ministers stated that they would work to formulate a new insurance model.
