Government urged to 'buy British' by steel producers

posted by Charlie Hart
14 August 2019

The UK steel industry is calling on the government to change public procurement guidelines to maximise supply opportunities for British producers. 

In the manifesto, ‘A New Deal for Steel’, trade body UK Steel urged the government to use its power as "the largest investor in UK construction and infrastructure projects, and the biggest single purchaser of steel".

The government's "procurement decisions are a hugely powerful policy tool," it said.

The industry employs tens of thousands of people in the UK. Despite the recent collapse of British Steel, the government should look to a future where “modern, high-value and low-carbon steel industry prospers and contributes to the UK economy and the challenges society faces,” the manifesto stated. 

As part of its actions to secure the industry’s future, the government needs to maximise the levels of UK steel purchased for publicly funded infrastructure projects.

In 2017/2018, the UK government procured 43% of its steel from the UK, 42% from outside the UK and 15% came from an unknown origin. UK Steel said while this is a positive benchmark, it demonstrated "room for improvement." 

The manifesto, released this month, called on the government to extend the public guidelines on public procurement of steel to all major UK construction or infrastructure projects "in receipt of indirect public funding."

In addition, all suppliers of steel to public projects should "provide clear proof of origin."  

Grace Skelton, UK Steel Senior policy adviser, told SM: “Government infrastructure projects will require an estimated 3.76 million tonnes of steel in the coming years – the use of UK produced steel for these projects would boost our economy by £2.7 billion and provide over 6,600 jobs."

She added: "Whatever the outcome of Brexit, it is essential that government uses the new political and regulatory freedom afforded to it to back British industry, particularly when it comes to these big ticket government contracts.”

The trade body wants to see central government departments sign up to the UK Steel charter, which makes "a public commitment to carrying out key actions to maximise supply opportunities to UK steel producers."

Skelton said while the charter had been signed by the Department for Business, Energy and Industrial Strategy (BEIS), the Scottish Government and Welsh Government, UK Steel would be targeting more central government departments.

“In the coming weeks and months we will be encouraging others to sign up, in particular those government departments with oversight for major projects and spending, such as the Department for Transport and Ministry of Defence, as well as other major infrastructure projects including HS2 and offshore windfarm developers.”

A BEIS spokesperson said: “The government is committed to supporting a sustainable UK steel industry that is productive, innovative and highly-skilled and we’re working with industry, unions and devolved administrations to achieve this."

They added: “We’re backing the sector through public procurement rules, have provided it with more than £300 million of support to cut energy costs and will invest an additional £315m to help businesses with high energy use save on their bills and decarbonise.”

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