UK should give preference to local steel in public procurement

A significant portion of steel purchased by the UK government is imported, costing taxpayers £1.5 billion annually, according to a new report by the UK Steel industry association. As the nation's largest steel buyer, the government has a unique opportunity to bolster the domestic steel sector by prioritizing local suppliers in public procurement.

The Opportunity for UK Steel

Currently, one-third of the steel procured by the government comes from foreign sources. Over the next decade, government steel requirements are expected to exceed £4.3 billion, even without factoring in large-scale initiatives such as carbon capture and storage, hydrogen infrastructure, nuclear energy, and offshore wind power.

A study commissioned by UK Steel and conducted by LumenEE highlights the enormous potential for domestic steel production in specific sectors. For example, investments in offshore wind energy around the UK coast are projected to require up to 25 million tons of steel over the next 25 years. This segment alone is estimated to have a procurement value of £21 billion ($26.5 billion).

The report underscores that with the right government support, the UK steel industry could meet these demands and benefit from broader opportunities within the metals supply chain.

Recommendations for Supporting Domestic Steel

UK Steel has called on the government to prioritize local steel in infrastructure projects. Key recommendations include:

1. Incorporating domestic steel preferences into public procurement contracts.
2. Establishing requirements for the use of local steel in government-funded projects.
3. Collaborating with the industry to create a robust steel strategy that ensures taxpayer investments benefit the UK economy.

Gareth Stace, CEO of UK Steel, emphasized the importance of strategic procurement, stating:

"The UK steel industry is ready to work with the government to develop a strong steel strategy that prioritizes local production. Strategic procurement can turn taxpayers’ investment into a win for the economy, preserving well-paid jobs and revitalizing our industry."

Government Initiatives to Support Steel

The UK government is launching a new Industrial Strategy and Sovereign Wealth Fund, aimed at providing stability for investors and supporting the manufacturing base, including the steel sector. These initiatives are seen as crucial steps toward fostering a competitive and sustainable domestic steel industry.

By prioritizing local steel production, the UK can strengthen its industrial base, create jobs, and reduce reliance on imports, ensuring long-term benefits for the economy and the manufacturing sector.