UK Export Finance’s Direct Lending Scheme (DLS) has been doubled to £3bn, with the chargeable interest rates also being reduced by one-third, Chancellor George Osborne has announced in his 2014 Budget.

The scheme is supposed to allow the export credit agency (ECA) to issue loans to overseas buyers in order to purchase UK goods and was announced in the Autumn Statement of 2012. However, UKEF has confirmed to GTR that it is yet to issue a single loan as part of the DLS.

A spokesperson says that due to the long transactional lead time, it is unable to confirm when the first funds will be drawn-down, but suggests that this won’t happen “in the next month”.

Furthermore, in figures contained within the Budget 2014 report, the UK government seems to have conceded that its target of doubling exports to £1tn by 2020 will not be met.

A report published by think tank Reform in November 2013 found that if the UK is to reach its targets, exports need to be growing by 9% a year. However, figures taken from the Office of Budgetary Responsibility (OBR) and cited by the government in its report predict maximum growth of 5% a year up to 2018, with a return of just 2.6% this year.

It would be a huge blow for the government, which had made the target the cornerstone of its export strategy. It adds to the sense that the budget, which was billed as packing significant measures to improve UK exports, has failed to introduce the reform expected. One lawyer who works extensively in the exports sector described the chancellor’s announcements as “underwhelming”, saying that most stakeholders were hoping for more.

When the DLS eventually comes online, though, more exporters can expect to take advantage of it. The scheme was previously open to deals valued between £5mn and £50mn. Now, though, the limits have been removed, meaning it is open to larger and smaller export contracts.

As such, the Federation of Small Business (FSB) welcomed the announcement, with chairman John Allan saying: “Funnelling more money to businesses will enable many of them to increase their exporting activity. This needs a sustained effort to give small firms the confidence to take the first step and enter a new market.”

Generally, the extra capital allowance has been greeted positively. Andrew Wild, global head of mid-market and business banking for HSBC, tells GTR that it’s a “positive step” but that “we hope to see this followed by a widening of export guarantees to cover more countries”.

Lloyds’ director of global trade Jacqueline Keogh tells GTR: “The chancellor’s commitment to double the lending available for export finance is a welcome uplift for UK trade. It sends the right signal to businesses across the UK which have gained in strength over recent months.”

However, analysts have warned that if UK exporters are to become more competitive, the additional finance will have to be disbursed soon and is unlikely to be enough. Senior economist at Markit Economics Rob Dobson says that while any support is a good thing, the big question is how effective it will be.

He tells GTR: “UK exports are very big, export markets are very deep. It’s a good start but a drop in the ocean that’s needed. There can be a sense of frustration [about the sluggishness of UK government schemes]. Compared to other countries like Germany, sometimes UK manufacturers feel the support isn’t as great and it puts them at a competitive disadvantage.”

Other announcements which are likely to impact UK trade and exports include the initiation of UKEF’s Export Refinancing Facility (ERF) by the end of April 2014. Again, this scheme was announced in July 2012, but has yet to disburse a single penny in loans.

UKEF will now also be permitted to export the exporter, rather than the export. To date, the agency can only issue guarantees on the back of tangible export contracts. With this change, though, it opens the door for larger manufacturers to financially support their supply chains.

UPDATE: A UKEF spokesperson has contacted GTR with the following statement: “The OBR stats aren’t an admission that the targets wont be met. The export package in the budget yesterday was aimed at boosting exports towards meeting the 2020 target. It is an ambitious target but government is continuing to work towards it.”