Department for Business, Innovation and Skills
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£80 million support package for SSI workers and local economy

The government has announced a package to support people who have lost their jobs as a result of the mothballing of SSI’s Redcar plant.

  • government to provide package worth up to £80 million
  • funding will support workers with training and help local firms to grow and create jobs
  • unrealistic proposal from company rejected, liquidation a risk

The government has today (2 October 2015) announced a package worth up to £80 million to support people who have lost their jobs as a result of the mothballing of SSI’s Redcar plant and invest in the future of the Tees Valley economy.

The package includes:

  • funding for affected workers to train at local further education colleges and tailored support for them via Jobcentre Plus
  • finance to assist workers if they want to start up their own business and for local small businesses to grow and create jobs

Full details of the package are being worked through and discussed with local stakeholders. The government will also consider proposals put forward by the local taskforce being led by Amanda Skelton, Chief Executive of Redcar and Cleveland Borough Council. Business Secretary Sajid Javid and Business Minister Anna Soubry will both be attending a meeting of the taskforce in Redcar today.

Business Secretary Sajid Javid said:

This is an extremely difficult time for the workforce at SSI and the local community. The package we are announcing today will provide important support to workers and the local economy. Across government we will continue to focus on providing assistance where we can.

After weeks of discussions the government can also confirm that the company made a last minute and unrealistic request for the taxpayer to make an open-ended funding commitment to maintain the coke ovens in Redcar.

The government cannot accept the request. On the basis of the limited business case it was given, the government has no confidence that this is a realistic proposal for taxpayers to support. In addition, it would be illegal and in breach of state aid rules. The company has never made a profit and the board’s proposal would do nothing to address the huge debts outstanding to local suppliers and other parties.

The Thai parent company of SSI UK has also posted on its website that it has entered “rehabilitation” under Thai law. Clearly liquidation in the UK is a risk.

The government will be holding a steel summit on Friday 16 October 2015. Steel companies, MPs, trade unions, Welsh and Scottish government representatives will be invited to look at how best to work together to find solutions to the challenges being faced in the current very difficult global market conditions. It will also start mapping out a path to a sustainable future for the industry.

Notes to editors:

  1. The government is also currently considering a landmark devolution proposal from Tees Valley which would devolve powers from Whitehall into the hands of local people and businesses.
  2. Providing direct financial aid to the steel industry is illegal under state aid rules. Government agencies have worked tirelessly to help the company where we can and within the bounds of the law.
  3. Since 2013 the government has paid £47.7 million in compensation to steelmakers to mitigate the impact of climate change policy on electricity costs.
  4. In July 2015, the government voted for the extension of EU anti-dumping measures on Chinese wire rod products. The government is aware of the impact of imports on the industry and will consider further cases as they arise.
  5. The government has identified a pipeline of over 500 infrastructure projects to help the industry win contracts and taken steps to ensure business gets the most out of procurement opportunities through the government’s ‘Contracts Finder’ portal.
  6. The government is undertaking the most wide-ranging review of national business rates in a generation.
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