Parliamentary Committees and Public Enquiries
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As British Steel costs top half a billion pounds, PAC asks govt: What’s the plan?
Decisions about many aspects of the future of publicly-owned British Steel remain unresolved. In a new report, the Public Accounts Committee (PAC) warns that the government has not yet set out a credible plan for how the company, on which £1.3m/day of taxpayers’ money continues to be spent, will become financially sustainable.
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The government successfully bought time for British Steel by using emergency legislation to prevent the closure of its blast furnaces in April 2025. The PAC is warning that this did not resolve the underlying problem - that British Steel remains structurally unprofitable. Over a year later, the government is unable to articulate what business model or decarbonisation pathway puts the company on a sustainable footing. The PAC’s report demands a plan be published by government for the whole of British Steel.
As at March 2026, spending on British Steel was expected to reach £642m by 30 June 2026, including adviser costs. By 18 June 2026, the Department for Business, Innovation, Science and Trade (BIST) had provided £555m in funding for working capital, including payments for raw materials and workers' salaries. Now that the company is nationalised, the Department for Business, Innovation, Science and Trade (BIST) continues to fund it, without a clear end in sight, and without being able to provide even indicative estimates to the PAC of how much it will ultimately cost the public purse - how much investment may be required to transform the company, how much will go on advisers and other support, and how long this state of affairs will continue. The PAC is warning that taxpayers remain exposed to significant and growing costs and uncertainty - it is not clear whether the money will ever be recovered.
There is further uncertainty over the long-term future employment for British Steel’s 4,052 employees. Trade unions have stressed to the PAC the importance of any transition from blast furnaces to more sustainable electric arc furnaces to be carried out in a way that protects jobs and skills. At the start of the government’s intervention, it engaged effectively with unions as well as the local council, but a further lack of clarity hangs over how it will involve them in shaping the future of the company and the wider steel sector. The PAC expects BIST to continue to involve these key stakeholders in a meaningful way.
There are also wider unanswered questions around the UK’s steel sector raised by the PAC’s inquiry. BIST was unable to explain how much of the government's £2.5bn commitment to the steel sector remains available once support for British Steel is taken into account. It was further unable to be clear on how it will deliver the wider conditions needed for a competitive steel sector, including coherent policies on affordable energy, skills, decarbonisation, research and development, access to iron and scrap, and investment in future technologies.
The PAC has particular concerns around the adverse impact on businesses from the government’s new steel tariff regime. In order to help UK steelmakers, BIST has increased tariffs on imported steel, but without taking into account the needs of firms reliant on these products. When asked by the PAC if the tariffs could put small firms out of business, government could only say it was "afraid that may well be the case". The current regime, the PAC finds, risks engineering companies which are users of steel having to pay tariffs on types of steel that they cannot avoid importing. BIST further said it could not help businesses who find it difficult to secure supply from UK manufacturers. The PAC is recommending that BIST urgently establish a formal route for businesses to raise concerns about the new tariff regime, and set out how it will mitigate unintended impacts on UK manufacturers.
Chair comment
Clive Betts MP, Deputy Chair of the Public Accounts Committee, recently said:
“Government moved swiftly to save British Steel - all well and good, and our Committee of course welcomes this action as a means of safeguarding a critical part of our national infrastructure and security. But this was just the beginning. Having brought British Steel onto the taxpayers’ books, it is now up to government to explain its plan for its future. Unfortunately, beyond simply propping up the company with public money, the government was not able to outline such a plan to our inquiry. The reality is that British Steel is unable to wash its own face, and government is now in charge of making sure it gets onto a sustainable financial footing for the future.
“Government must continue to work hand in glove with North Lincolnshire Council and the three trade unions representing British Steel workers to bring about a just, managed transition to a successful low-carbon future for the company. We also require assurances that the startling levels of funding British Steel is currently receiving do not come at the expense of the wider sector. The recent move from the government to acquire Speciality Steel emphasises the point that government can’t spend all its money supporting British Steel, when clearly there will be a need to support other parts of the industry. We similarly expect to see no further complacency from government at small firms going out of business due to its steel tariff regime. We have seen admirable short-term support from the government in steel on a number of fronts, but in the long-term, our report must serve as a challenge to the administration as we ask once again: what’s the plan?”
Further information
Original article link: https://committees.parliament.uk/committee/127/public-accounts-committee/news/217939/as-british-steel-costs-top-half-a-billion-pounds-pac-asks-govt-whats-the-plan/
