UK steel to benefit from £500bn govt pipeline

Posted on 14 Dec 2016 by Jonny Williamson

The government is planning to use three million tonnes of steel in infrastructure projects by 2020, with changes in place to enable UK steel manufacturers to better plan and bid for state contracts.

Under the changes, government will start publishing their indicative future UK steel requirements on an annual basis, initially looking forward to 2020. It complements the new National Infrastructure and Construction Pipeline, which set out more than £500bn worth of planned private and public investment over this Parliament and beyond.

From roads to rail, defence to nuclear, the new data will show that central government infrastructure projects will need enough steel to build the equivalent of 173 Wembley stadiums – or three million tonnes worth of steel across 18 separate projects.

These will include the upcoming High Speed 2 rail project, the construction of Hinkley Point, and for the maintenance and upgrading of the motorway system.

Business and Energy Secretary, Greg Clark explained: “These changes will ensure that UK steel companies can better plan for the long term, giving them an even greater chance of securing government contracts.

“We want UK companies big and small to be bidding for and winning government contracts which is why our upcoming Industrial Strategy is so important. This strategy will ensure we make the right investments in science, research, skills and infrastructure so that British industry wins contracts by producing the best goods and services.”

As well as providing greater visibility on upcoming projects needing steel, procurement guidance has also been extended to include projects below the current threshold of £10m and those from local and health authorities.

Minister for the Cabinet Office, Ben Gummer commented: “We will always strive to get the best value for money for taxpayers and we are going to do so in a way that strengthens our economy and bolsters the long-term prosperity of people across the country.

“I don’t want contracts going abroad if the best value for money bid is a British bid with all the social and economic benefits that brings. By updating our procurement approach on these major infrastructure projects we are creating a level playing field for UK steel.”

UK Steel Mill Factory Foundry - image courtesy of Pixabay.
Procurement guidance has also been extended to include projects below the current threshold of £10m – image courtesy of Pixabay.

Director of UK Steel, Gareth Stace, and Deirdre Fox, chair of the Procurement and Commercial Working Group of the Steel Council commented: “This is a welcome announcement which moves the procurement process on a step further and will ensure that more UK steel will be used in a greater range of government funded projects.

“These documents are a testament to the hard work of government, industry and trade unions, however clearly more work needs to be done to ensure returns improve in the coming months and years, and we look forward to working with government to achieve this shared goal. The steel sector also continues to take steps with the private sector to increase the level of British steel purchased.”

Chief executive of EEF, Terry Scuoler said: “UK made steel should be the backbone of major projects, not by default but because of the high quality and competitiveness of the products made here in the UK.

“This announcement shows a much more positive approach to procurement and, British content and jobs, by the government in thinking about the economy and UK industry’s role in delivering successful projects.”