A SCHEME using taxpayers' cash to fund loans to small local businesses has helped only ten out of more than 200 applicants and has cost far more to set up than the actual amounts paid out, it has been revealed.

Calls have now been made following the revelations to scrap the “useless” and “wasteful” 'Banking on Essex' project, which was the brainchild of former Essex County Council leader Lord Hanningfield, who has since resigned after he was charged with fraud.

Despite being launched to great fanfare a year ago, with £50million being set aside to fund it, the council has paid out just £145,000 in loans, matched by bank Santander, but spent £250,000 establishing the scheme in the first place.

A total of 223 businesses have expressed an interest in it, but only ten have received any money, with a further 14 still being considered for loans.

Accountant and UKIP activist Mick McGough, of Wellfields in Loughton, who uncovered some of the details using the Freedom of Information Act, said: “Banking is for bankers, not for county councils.

“If businesses need help then it is not for the taxpayer to shoulder that risk, if the banks won't lend to a company why should we?

“There just seems to be no logic in it – and when are we ever going to get this money back?

“It seems all these grandiose schemes were set up by Lord Haningfield because he wanted to make Essex the leader in all sorts of areas while neglecting the core tasks that councils should be focusing on, like fixing the many pot holes which are all over our streets”.

The Essex Lib Dem's economics spokesman David Kendall has claimed that the figures show that the council is no more willing to give out loans than ordinary high street banks, but called for a more “pro-active” approach.

He said: “After all the hype and publicity I was really hoping this scheme would provide much-needed help and support to small businesses in Essex".

He added: "If the economy in Essex is going to be given the kick start it badly needs, then ‘Banking On Essex’ should be playing a much more proactive role in promoting and advertising what it can offer to small businesses, and certainly giving them more support than they are at the moment."

Council leader Peter Martin told a meeting that the authority was analysing the scheme to see how to “move forward” with it.

The Guardian has requested to speak to Cllr Martin about the issue.

Lord Hanningfield has denied fraud and has said he will fight to clear his name.