Javid urges public sector to buy British steel

4 Apr 16

Public sector infrastructure procurement, including tenders from councils and the NHS, will need to specifically consider using British steel, the government has announced as part of moves to shore up the ailing industry.

Tata Steel, the Indian owners of the Port Talbot plant in south Wales, announced last week, it intended to close the site, putting thousands of jobs at risk, unless another buyer can be found.

Full nationalisation is unlikely, but business secretary Sajid Javid announced a change to procurement rules to help British steel companies should be able to compete on a level playing field for public sector contracts.

While central government procurements have been required to consider the social and economic impact of the steel they source since October 2015, this duty is now being extended to local government and the health service.

Javid said: “By changing the procurement rules on these major infrastructure projects we are backing the future of UK steel – opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies.”

Cabinet Office minister Matt Hancock added that taxpayers spent billions buying steel for public infrastructure.

“From operating theatres to new buildings, public sector buyers will need to consider social and economic benefits, alongside value for money,” he said. “When public bodies buy steel they must take account of the true value of buying British.”

The government also announced today that it would establish a list of approved steel suppliers, who must meet robust health and safety standards, environmental impacts, responsible sourcing and workforce training.

Prime minister David Cameron will tomorrow meet with Welsh first minister Carwyn Jones to update him on ongoing discussions with Tata and what the action is being take to support a sale process.

According to the government, £300bn is to spent on UK infrastructure projects in the next five years. Network Rail, Crossrail, Highways England and Ministry of Defence aircraft carriers have all used British steel.

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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