Recommendation 3

The Department has not set out a clear or timely pathway for how long it will continue to support the company for, increasing the risk that costs and uncertainty will continue to grow. British Steel’s 4,052 employees were given short-term stability when the intervention happened, but there is still uncertainty over their long-term future employment. The Steel Industry (Nationalisation) Act has enabled the Government to nationalise British Steel, after a public interest test was met. The Department has appointed a new Board to build internal capacity to enable to private sector to invest in the plant. Any transition, for example from blast furnaces to electric arc furnaces, would require substantial investment, consultation with the workforce and local community, and implementation over many years. Trade unions stressed to us the importance of a managed transition that protects jobs, skills and industrial capability. Without a clear plan and managed transition, the UK risks higher costs and continued uncertainty. The UK steel sector could miss key market opportunities, fail to meet its ambition for domestic steel production, and lag behind progress being made in other countries, losing momentum in securing its future. recommendation As part of its plans for British Steel, the Department should clearly set out: a. how it will establish governance (including Board arrangements), reduce reliance on advisers and build internal capability; 4 b. how it will work with the Board and stakeholders (e.g. unions, local leaders) to set the direction for the future and ensure a managed transition; and c. provide assurance on how it will retain involvement with the company, given the importance for national and economic security.