Recommendation 2

The Department does not know how much the intervention will cost the taxpayer. As at March 2026, spending was expected to reach £642 million by 30 June 2026, including adviser costs. Actual funding was £555 million by 18 June 2026 (not including adviser costs). The Department continues to fund the company now that it is nationalised, without a clear end date in sight. While we recognise that some costs, including any potential compensation arising from nationalisation, remain uncertain, the Department could not provide even indicative estimates of how much taxpayers may ultimately be asked to fund. It could not explain how much investment may be required to transform British Steel, how much it expects 3 to spend on advisers and other support, or how long it is expected to remain in public ownership. The Department is assuming HM Treasury will continue to provide funding through the next spending review but could not provide clarity on the impact on other priorities if costs continue to increase. It is fortunate that the Department had budget underspend that offset some of the cost of the intervention in 2025–26, but it does not know what will happen in 2026–27. However the support is financed, taxpayers remain exposed to significant and growing costs and uncertainty, and, although the funding is classed as a loan to British Steel, it is not clear whether these amounts will ever be recovered. recommendation The Department should write to the Committee, alongside its Treasury Minute response to this report, setting out an estimate of total costs (other than compensation costs if any), including: a breakdown of funding to date and forecast future expenditure (operations, advisers, investment and transformation costs), sensitivity analysis under different options; and an assessment of the likelihood of recovering any of these amounts.