UK Steel has published a report containing a range of proposals to improve the uptake of British steel in taxpayer-funded projects.
It highlights the opportunity for the Government, as the single biggest buyer of steel in the UK, to further support its steel sector by procuring the steel it buys from domestic companies.
UK Steel says the Government has a unique opportunity to support the domestic steel sector, but the latest data reveals that a third of the steel it procures is not British, costing UK taxpayers £1.5bn annually rather than supporting UK steel companies.
British Steel Strategy and Marketing Director Lisa Coulson said: “We welcome this report and hope it leads to more British steel being used in Government projects.
“Our highly-skilled employees make world-class products and we have the capacity and capability to supply increased amounts of steel for domestic projects.
“We look forward to continuing to work with Government to ensure we deliver a stronger future for British Steel, our employees, customers, suppliers, and the communities in which we operate.”
UK Steel Director-General Gareth Stace said: “Strategic procurement can transform taxpayer investment into a win for the economy, safeguarding well-paid jobs and revitalising our industry.
“The findings on offshore wind alone illustrate what’s at stake: £21 billion in steel purchases that could drive a major upturn in UK production.”
Jonathan Clemens, CEO of the British Constructional Steelwork Association, added: “The BCSA believes this to be an important report detailing a way in which the UK Government and industry can work together and align to provide skilled jobs over the next three decades through a UK based supply chain providing a vital more sustainable energy source and a greener economy. BCSA membership represents the highest standards in quality and competence with respect to fabricated steel for the construction industry and civil engineering projects, with the Offshore market proving to be an area for growth and investment.”
It’s estimated that over the next decade, government will need to spend almost £4.5bn on steel without even accounting for major initiatives such as carbon capture and storage, hydrogen infrastructure, nuclear energy, and offshore wind.
Offshore wind experts LumenEE estimate that up to 25 million tonnes of steel will be needed in the next 25 years for offshore wind investment around the coast of Britain. This single opportunity alone is worth about £21bn in steel sales.
UK Steel has set out five key recommendations to ensure that, where reasonably possible, British companies stand at the front of the queue when Government is making purchasing decisions on steel. A change in culture is needed to reap the benefits of government-funded steel procurement. To do this is a win for the Government, for the UK steel sector and for the highly skilled, well-paid jobs that our sector provides.
Key recommendations to boost domestic steel purchases include:
- Public Procurement Contracts: The UK Government should use the contribution our steel industry makes to national security to mandate or incentivise the use of steel products manufactured in the UK, where possible, for projects of energy, defence, and related infrastructure via domestic content stipulations in contracts where public funding or subsidy is involved utilising World Trade Organisation (WTO) opt-outs.
- Contracts for Difference: In future auctions, the Government should evaluate the bidders’ contributions to sustainability, resilience, and local content, with these criteria applying to at least 30% of the volume auctioned annually, as the EU is currently implementing without challenge in its Net Zero Industry Act.
- Nationally Significant Infrastructure Projects: These should be required to adhere fully to the Procurement Policy Note for Steel and, given their criticality for our economy, be subject to local content requirements of not below 30%.
- Procurement Policy Note for Steel: The existing PPN should be strengthened to require developers and public bodies to justify why they did not use UK-manufacturers’ steel, if it was available, and require a mandatory consultation of the forthcoming UK Steel Digital Catalogue.
- Investment in steel supply chains: A public-private partnership should drive investment into steel supply chains, which will attract inward investment, create jobs, drive economic growth, and ensure the UK develops resilient supply chains in the face of uncertain geopolitics.
