Taxpayers face mounting and open-ended bills unless ministers set out how the nationalised British Steel will become financially sustainable, MPs warned. The Public Accounts Committee concluded the government cannot explain the business model that would return the Scunthorpe works to viability almost a year and a half after it moved into public ownership.
The committee said keeping the plant operating is already costing the public £1.3m a day and that total support could reach as much as £1.5bn by 2028. By mid-June the government had spent £555m on workers’ pay and raw materials, a figure the committee noted excludes fees for external advisers.
Committee members criticised the Department for Business and Trade for failing to offer even indicative estimates of how long taxpayer exposure will continue or how much the bill might total. Clive Betts, the committee’s deputy chair, welcomed the decision to save the business but pressed ministers for a plan. He said, "This was just the beginning. Having brought British Steel onto the taxpayers’ books, it is now up to government to explain its plan for its future. Unfortunately, beyond simply propping up the company with public money, the government was not able to outline such a plan to our inquiry. The reality is that British Steel is unable to wash its own face, and government is now in charge of making sure it gets on to a sustainable financial footing for the future. We also require assurances that the startling levels of funding British Steel is currently receiving do not come at the expense of the wider sector."
The committee has demanded ministers publish a clear strategy that lays out options and analysis for future production, the company's role in the UK economy, a preferred route to decarbonisation, and how the business will return to financial health, including expected costs, funding sources and a timetable.
The report arrives days after the government nationalised Speciality Steel UK, a move intended to protect 1,300 jobs. Jonathan Reynolds, the business secretary, said the government does not "intervene in private companies lightly", but that the step was taken to safeguard heavy industry.
Meanwhile the former owner, Jingye, says British Steel owed it almost £1bn when the state took control and has launched a formal international treaty process seeking compensation. China’s government has said it is "strongly dissatisfied" with the nationalisation.
MPs concluded taxpayers remain exposed to significant and growing costs and warned ministers that continuing to prop up the company without publishing a strategy will leave the wider steel sector at risk of competing demands for public support. The committee’s findings increase pressure on ministers to quantify the financial exposure and set out the next steps, including a timetable for reducing reliance on state funding.
