£34m a month spent by Government on British Steel
The Government says it remains committed to continue covering costs
The Government has spent an average of £34m a month running British Steel since taking effective control of it and it also remains committed to continue covering its operational costs.
Parliament sat on a Saturday in mid-April to pass emergency legislation to enable the Government to intervene. It came amid reports owners Jingye were not paying for further raw materials for the company’s coke blast furnaces at Scunthorpe.
Since mid-April, the Government has directed the running of British Steel. Recently submitted MP written questions have detailed the spend involved in rescuing the furnaces from closure.
It comes as British Steel currently recruits for a range of graduate roles, including in its IT, engineering, commercial, finance, operational and technical teams. In recent weeks, deals have also been announced for the use of British Steel products on major projects in Türkiye and Nigeria.
Andrew Griffith MP (Conservative – Arundel and South Downs) submitted this month several questions on spend on British Steel to the Department for Business and Trade. Responding to these, Industry Minister Chris McDonald MP (Labour – Stockton North), has stated so far the Government has provided the company with £274m, or an average £34m a month.
£173m was for the purchasing of raw materials. £47m went towards the payroll and £22m on energy costs. The rest went to various other essential business costs.
Mr Griffith asked if the money had been allocated as a loan, grant, or equity injection, and were there any conditions over repayment. Mr McDonald responded that the money is “recoverable as debt to the Crown”.
There are no conditions attached, except for funding to be used to run the business as set out in the Government’s April emergency legislation. “All funding released to British Steel is reviewed and approved in advance,” Mr McDonald added.
Under the terms of the legislation to take control of British Steel, the Government must update Parliament every four weeks it is in session. The latest such statement on December 10 by Mr McDonald stated the Government will publish its much-awaited Steel Strategy in early 2026. This will set out how it will support the sector.
The Industry Minister also addressed the British Steel sale situation. Jingye still own it, but the Government runs it.
There have been talks over transfer of ownership. The LDRS understands Jingye have sought recompense for the investment they say they put into British Steel in the years in charge between March 2020 and April 2025. Before the Government took over, it was stated by British Steel that Jingye had put in over £1bn.
In the December 10 statement, Mr McDonald said:
“We continue to work with Jingye to find a pragmatic, realistic solution for the future of British Steel.” The Government’s long-term aspiration “will require co-investment with the private sector to enable modernisation and decarbonisation, safeguard taxpayers’ money and retain steelmaking in Scunthorpe”.
He also answered a question by Mr Griffith on the predicted spend on British Steel between now and the Steel Strategy’s publication. “The Government is committed to supporting British Steel’s operational costs as needed, covering items such as raw materials and salaries,” answered Mr McDonald. He added future costs “are susceptible to wider macroeconomic factors”.
A fresh £35m contract for British Steel to produce rail products for high-speed rail in Türkiye was announced by Prime Minister Sir Keir Starmer. The company also recently signed a memorandum of understanding with Hitech Construction Africa Ltd to supply materials for port infrastructure in Nigeria.
British Steel is also appealing to all graduates for a range of graduate roles across its business.