Banks 'still leave small firms in the cold' a year after Government launched emergency scheme Net lending continues to fall sharply, down £300m from January to March Two of big culprits are Lloyds Banking Group and Royal Bank of Scotland Since last summer, their net lending has collapsed by total of nearly £11bn Small businesses are being "left out in the cold" nearly a year after the Government launched an emergency cash lifeline to rescue them, official figures revealed yesterday. On another dire day for Britain's banks, the Bank of England warned net lending continues to drop sharply, down £300million between January and March. Net lending is the total amount handed out by banks, building societies and other lenders, minus the total amount repaid by their customers. Falling: On another dire day for Britain's banks, the Bank of England (pictured) warned net lending continues to drop sharply, down £300million between January and March The figures reveal two of the biggest culprits are Lloyds Banking Group and Royal Bank of Scotland, which were both bailed out by taxpayers nearly five years ago. Since last summer, their net lending has collapsed by a total of nearly £11billion - £6.6billion for Lloyds and £4billion for RBS. Campaigners yesterday raised their fears about the success of the crucial Funding for Lending scheme which was launched in August last year. Under the scheme, banks are allowed to borrow an unlimited amount of money for as little as 0.25 per cent as long as they maintain, or increase, their lending. Ministers insist it will take time to work, while the Bank of England says the current situation would have been even worse for small firms if the scheme had not been launched. Yesterday Vince Cable, the Business Secretary, admitted: "The small business lending is the key to recovery and we are not seeing much action on that side. I would accept that. Down: Net lending is the total amount handed out by banks, building societies and other lenders, minus the total amount repaid by their customers He raised his fears the scheme could fuel "another housing bubble" as mortgages become easier to obtain and cheaper, adding: "It is a source of some concern." It has clearly helped homeowners and first-time buyers. Some loans, such as two-year fixed rate deals, have never been cheaper, according to the financial information firm Moneyfacts. The small business lending is the key to recovery and we are not seeing much action on that side Business Secretary Vince Cable But there is little evidence that the pain which has been inflicted on small firms for years is easing, while it has also hurt savers by pushing down interest rates on their nest eggs even further. Banks and building societies have received a total of £16.5billion of cheap money from the Bank of England - but net lending has continued to drop. John Longworth, director general of the British Chambers of Commerce, said: "The real test for Funding for Lending is whether it is able to get credit flowing to young and fast-growing businesses. Rival lenders, such as the peer-to-peer lender Funding Circle, yesterday rubbished claims by banks that small firms do not want money. Concerns: Vince Cable, the Business Secretary, admitted that 'small business lending is the key to recovery and we are not seeing much action on that side' Samir Desai, chief executive, said it is receiving 25 per cent more applications than it was three months ago, adding: "Over half of our customers attempted to secure a bank loan before coming to us." John Allan, national chairman of the Federation of Small Businesses, said: "We need to see more businesses being accepted for finance." Many of these growth firms are still being left out in the cold when it comes to accessing finance John Longworth, British Chambers of Commerce By comparison, small building societies, such as Leek United and the Cumberland, are managing to lend more money than many of Britain's biggest banking giants. Lloyds and RBS insist they are lending to small firms, but their dire net lending figures are being skewed by shutting down high-risk parts of their business, such as commercial property loans. Lloyds said its small business net lending has risen four per cent over the last year. RBS said it has "allocated" more than £3.6billion of cheaper loans to over 22,000 small business customers. A Treasury spokesman said: "The Funding for Lending Scheme was introduced to make loans cheaper and more easily available. The cost of credit for homeowners and businesses overall continues to fall, with some mortgage rates at their lowest for five years.