Why is there a public funds row over Alexander Dennis leaving Scotland

The Herald Scotland

6 days ago

A government funding row stems from ADL securing tens of millions in [[pub]]lic money after first proposing to cut around one-third of its Scottish workforce, including facilities in Falkirk and Larbert in 2020 and then admitting it is looking to move to England in June.
Scottish Enterprise, the agency managing government support, has stated that its most recent review found 'no risks had been identified that would preclude continued funding' to Alexander Dennis.
Who is Alexander Dennis and why does it matter to Scotland?
Alexander Dennis Limited (ADL) is a major bus and coach manufacturer headquartered with bases in Falkirk and Larbert. Formerly Scottish-owned, it was acquired by Canada's NFI Group in 2019.
ADL employs around 1,850 people in the UK, with a significant proportion based in Falkirk and Larbert.
The company is a leader in zero-emission bus technology - electric and hydrogen buses - and plays a key role in delivering Scotland's and the UK's green transport ambitions.
What are the current challenges facing Alexander Dennis?
ADL says it faces an 'uneven playing field' due to policies that favour foreign competitors, including Chinese electric bus manufacturers, whose market share recently rose from 10% to 35% in the UK market
ADL's leadership highlighted that government procurement and subsidy schemes tend to prioritise lowest cost rather than domestic manufacturing or local job creation
Additionally, UK policies under the Subsidy Control Act 2022 limit the ability to favour domestic suppliers in public funding, while Scottish rules require UK-based firms to meet Fair Work First standards, which it is claimed put ADL at a competitive disadvantage compared to international rivals who are not bound by these conditions.
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Scottish Zero Emission Bus Challenge Fund (ScotZEB) allocated £100m for green bus procurement. However, according to former SNP minister Michael Matheson with 523 vehicles ordered, only 162 - less than a third - were built by Scottish manufacturers like Alexander Dennis. It was estimated the rest went to overseas firms, including around half from China.
Why are jobs in Scotland at risk?
In September 2024, ADL launched a consultation on cutting 160 jobs at its Falkirk site due to funding imbalance and policy challenges
In June 2025, the company announced plans to end manufacturing altogether in Falkirk and Larbert, consolidating operations at its English site in Scarborough—putting up to 400 jobs at risk in Scotland.
(Image: Andrew Milligan/ PA) Unite and other unions warned that up to a multiplier of 1,600 jobs could be affected in the wider supply chain and support services if the closures proceed.
Why is this important to Scotland?
ADL is one of the largest manufacturing employers in central Scotland with many roles in engineering, apprenticeships, and high-skill technical jobs. The loss of production capacity would affect not only existing jobs but also local supply chains and community livelihoods
ADL positions Scotland at the forefront of zero-emission transport technology, aligning with national climate targets and global export opportunities.
It is argued that losing manufacturing in Larbert and Falkirk would diminish Scotland's ability to innovate and scale production in green mobility - a strategic disadvantage amid increasing global demand for clean public transport.
Why is the public funding of Alexander Dennis an issue?
ADL has received some £90m of taxpayer cash over the past ten years and tens of millions since a 2020 plan to axe a third of its Scottish workforce in advance of June's plan to exit to England. The firm had also admitted they had been 'forced' to offshore certain manufacturing functions to China.
The public funding is contentious because substantial taxpayer money - allocated to secure jobs and promote clean, local manufacturing in Scotland has coincided with offshore production, reduced domestic orders, and now a possible factory closure and mass redundancies. This raises questions over policy design, procurement strategy, and accountability for economic outcomes.
What does the Scottish Government say and how are they responding?
Deputy First Minister Kate Forbes described the situation as 'hugely worrying' and says the [[Scottish Government]] is actively exploring all options to preserve jobs and retain manufacturing capacity in Scotland.
The government is working with the UK Government, Transport Scotland, Scottish Enterprise, and trade unions to identify mitigation measures and potential support programs.
What solutions are being proposed?
Fairer procurement frameworks involving publicly funded support, including giving greater weight to local content and job creation.
There has been a call for the creation of a strategic industrial partnership involving government, trade unions, industry, and colleges to support retention, reskilling, and redeployment of skilled staff in transitioning industries.
Euan Stainbank MP and others have urged city-region mayors in England to place zero emission bus orders with ADL in Scotland.
Their letter proposes orders totaling 70 buses in 2025, and 320 buses in 2026, to maintain steady production and job continuity.
Prime Minister Sir Keir Starmer confirmed Labour support, stating they're working with mayors to secure future orders and uphold manufacturing in [[Falkirk]] and Larbert.
A joint UK-Scottish Government working group, alongside Scottish Enterprise and trade unions, is meeting weekly to explore viable ways to sustain local operations.