Taxpayers face £250m bill for MG Rover

MG Rover

The collapse of MG Rover, combined with government efforts to mitigate its
impact on the West Midlands economy, could cost more than £250m, the National
Audit Office has estimated.

The NAO said the bill included £40m in redundancy payments, £50m for
retraining the company’s workforce, a £90m cost when BMW sold MG Rover in 2000
spent on modernising and diversifying the region’s economy.

In addition, another £5.2m represented the balance of a £6.5m loan paid to
administrators PricewaterhouseCoopers to keep the Longbridge plant running for a
week after the carmaker collapsed and which is now likely to be written off.

The figures did not include likely losses of £18m on taxes which MG Rover was
allowed to defer, nor the £3m spent by the Department of Trade and Industry in
its inquiry into the demise of the last British-owned mass carmaker.

To add salt to the wounds, the DTI was slammed for its failure to draw up
plans early enough to cope with any scenario other than the collapse of the

The NAO said it recognised the benefits obtained by the loan but concludes
that it was doubtful whether those benefits and the remote prospect of a
going-concern sale represented the DTI with sufficiently good value for the

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