Government spends £377 million to save UK's last two steel blast furnaces
National Audit Office warns potential costs could exceed £1.5 billion
The British government has expended £377 million to prevent the closure of the nation's last two operational blast furnaces at British Steel’s Scunthorpe site.
This intervention, led by the Department for Business and Trade, aimed to protect jobs and maintain steel production capacity after British Steel’s owner, Jingye Group, announced significant financial losses and plans to close the furnaces.
The National Audit Office (NAO) has released a report articulating that the total cost could surpass £1.5 billion by 2028 if spending continues at current rates.
Despite the intervention, which included passing the Steel Industry (Special Measures) Act 2025 to keep operations ongoing and avert an economic shock, British Steel's financial stability remains unachieved.
The government continues to face risks and cost challenges with this intervention and has not established a comprehensive exit strategy.
Moreover, the report notes that DBT is reviewing future plans for the Scunthorpe site, including potential partnerships or conversion of existing infrastructure to more sustainable electric arc furnaces.
The NAO suggests that DBT should use insights from this intervention to manage future economic shocks and plan strategically to support a sustainable steel industry.