New public sector boost for UK steel

Posted On: 4th April 2016

The Government has pledged that British steel companies will be able to compete on a level playing field for contracts across the public sector, under new measures announced. steelworks

With around £300 billion due to be spent on major UK infrastructure projects over the next five years, the two new initiatives announced will support steel suppliers’ ability to compete with international suppliers for major government and public sector contracts – as part of the government’s plan to secure the long term future of the steel industry in the UK.

Guidance introduced in October 2015 already means that all central government departments must consider the social and economic impact of the steel they source across all major projects, including on HS2, where over two millions of tonnes of steel will be needed. This means that steel contracts for this £55 billion project will not go abroad if the most competitive bid is British.

The Government has announced that, for all relevant contracts, the public sector will be required to adopt these reforms introduced by central Government. Public procurements that involve the supply of steel, will need to consider responsible sourcing, the training suppliers give to their workforce, carbon footprint, protecting the health and safety of staff and the social integration of disadvantaged workers.

This will allow buyers across all major projects to take into account the true value of British steel, including its social impact. Contractors working for the public sector will also be required to advertise their requirements for steel so that UK firms can compete.

The Government has already taken a number of steps to alter procurement rules to create a level playing field for the sector. In February 2015 it was the first country to put new EU procurement rules into action that emphasise the taking account of wider social and economic considerations, including when buying and sourcing steel.

The announcement comes after Business Secretary Sajid Javid visited TATA at Port Talbot this Friday to hear their concerns and reassure them that the Government was doing all it could to secure a long-term future for the plant, and for British steel.

The Prime Minister will also meet with Carwyn Jones, First Minister of Wales, on Tuesday to update him on the Government’s ongoing discussions with Tata and our work to support a sales process.

Other steps the government has taken to help secure the future of this sector in the UK include:

  • Moving to exempt energy intensive industries – including steel – from energy costs, which will save industry £400 million by the end of the Parliament.
  • Securing flexibility over EU emissions regulations.
  • Continuing to tackle unfair trading practices at an EU and an International level.
  • And measures imposed in January on reinforcing steel bar imports are already starting to have an effect – imports in January 2016 were 99 per cent down on January 2015.
  • Our new steel Council met for the first time on 2 March and will look at the longer term future of the sector and how we can strengthen its capability and competitiveness.

The Government has also announced that it will establish a list of approved steel suppliers. Companies on this list will meet stringent criteria including high and robust standards around health and safety, environmental impacts, responsible sourcing, supply chain management and training the workforce. The list will be used by the Government and its contractors and will help to ensure a level playing field for those suppliers who meet the criteria.

Matt Hancock, Minister for the Cabinet Office and Paymaster General, said:

“We are going further than ever before to support British steel. Taxpayers spend billions of pounds buying steel for public projects. Last year we changed the rules across all central government procurement to ensure buyers take into account the true value of British steel – including local impact and jobs.

The industry is responding positively to this so I want to go further. Now we will apply this guidance across the public sector so that, from operating theatres to new buildings, public sector buyers will need to consider social and economic benefits, alongside value for money. When public bodies buy steel they must taking account of the true value of buying British.”

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