The public accounts committee has criticized the government for lacking a clear business model for the nationalized British Steel, which costs £1.3m daily to operate.
Key facts
- •British Steel costs £1.3m per day to operate under public ownership.
- •Total costs for the company are estimated to reach up to £1.5bn by 2028.
- •The government spent £555m on salaries and raw materials by mid-June.
- •The public accounts committee is demanding a plan detailing decarbonization, funding sources, and a production model.
- •Former owner Jingye is seeking compensation for nearly £1bn it claims was owed.
The UK government faces pressure to provide a credible future plan for British Steel after the public accounts committee warned of the mounting costs associated with the manufacturer. The company, which was taken into public ownership in July to prevent the closure of its Scunthorpe works, is currently costing taxpayers £1.3m per day.
By the numbers
Rising Costs and Lack of Strategy
The public accounts committee stated that ministers have failed to articulate a business model to make the company sustainable, despite having controlled the Scunthorpe site for nearly 18 months. The committee noted that the Department for Business and Trade has not provided estimates regarding the total eventual cost to taxpayers or a timeline for the intervention.
Broader Industrial Impact
Lawmakers expressed concern that the high levels of funding required for British Steel could negatively impact the wider steel sector. This follows the recent nationalization of Speciality Steel UK, a move intended to protect 1,300 jobs. The committee emphasized that the government cannot focus its financial support solely on British Steel at the expense of other industrial needs.
Legal and Diplomatic Tensions
Former owner Jingye has initiated a formal process under an international treaty to seek compensation, claiming the company owed it nearly £1bn at the time of nationalization. The situation has also strained UK-Chinese relations, with the Chinese government expressing strong dissatisfaction.
Timeline
- 15 months prior to JulyThe government initially intervened to prevent the closure of the Scunthorpe steelworks.
- JulyBritish Steel was taken into public ownership.
- Mid-JuneGovernment spending on salaries and raw materials reached £555m.
- FridayThe public accounts committee released its report criticizing the lack of a business plan.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by Guardian Politics (UK).
