A report issued today by the Public Accounts Committee says that the collapse of MG Rover cost the UK tax payer around £270million.
The report goes on to say that the cost to the private sector and former MG Rover employees is likely to be around £600million, due to an estimated pension deficit of £500million, and £109million owed t UK-based creditors.
The report analyses the response to MG Rover’s downfall from both the Department for Trade and Industry (DTI) and local agencies in the West Midlands. It criticises what it calls “serious gaps in the Department's detailed planning,” but praises its success at arranging “immediate support for former employees following the collapse.”
Local agencies in the Midlands come in for further praise, the report stating that they “did well to respond quickly and effectively in the immediate aftermath of the Company collapse… They showed how local agencies can respond effectively to an impending crisis by drawing up plans well in advance.”
The report says over 4300 people who lost their jobs have now found work, but that around 2000 people, who are ex-employees of both MGR and its suppliers, are still out of work. The DTI is also investigating the former directors of Phoenix Venture Holdings, who received £40m between 2000 and 2005.