The United Kingdom has taken control of British Steel before assessing costs for taxpayers, letters show
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The British government has decided to take control of British Steel before having evaluated the costs for taxpayers, which raised questions about the ultimate savings price of the last two stoves in the country.
Jonathan Reynolds, secretary to business, published a “ministerial management” to prevail over the concerns of his own civil servants in order to maintain operations of the characteristic in difficulty on his main site in Scanthorpe, Lincolnshire, letters published on the government’s website.
The ministers intervened in early April by adopting emergency legislation to take control of British Steel, which employs around 3,500 people in the United Kingdom, including 2,700 at SCUTHORPE.
Reynolds responded to Gareth Davies, permanent secretary for business and trade, after the official warned the minister on April 12 that he could not guarantee that taxpayer money on steel rescue would respond to his responsibilities.
Davies said that the government had been required to act at such a speed that it had not had time to bring together the “necessary evidence” to ensure that the expenses were in accordance with the four tests of the government.
Public spending tests require the cost of the intervention to be compared to alternative proposals or “do nothing” to verify that it represents the “value for money”.
The tests also require that there is a sufficient legal basis to take measures and that it meets high standards of public conduct and is possible, so that this decision can be implemented “with precision, sustainably and on the scheduled calendar”.
The ministerial instructions, which are rare in British policy, are official instructions indicating to the services to continue a proposal for expenses despite the objections of a permanent secretary, the highest -end official of a ministry.
This is the first management of this type this year, after two in 2023 and two in 2024 in the Whitehall set.
British Steel was the subject of a ministerial management in 2019, when the company collapsed in insolvency and the secretary of companies of the time, Greg Clark, sought to continue the expenses of taxpayers to keep it under the control of the State when he was looking for a private buyer. The company was then bought by Chinese company Jingye in March 2020.
The government has adopted emergency legislation this month after it has become clear that Jingye was planning to close the two British Steel Hauts-Four. The closure would have left the United Kingdom as the only G7 nation without the ability to make steel from raw materials.
Reynolds then supervised the delivery of raw materials to the SCUTHORPE site of British Steel to ensure the continuous operation of the two ovens.
The business secretary said that the nationalization of the company remains a “probable option”, although managers and other industry experts are preparing an “investment case” to attract a third -party buyer for British Steel. Hope is that another private enterprise can be found to take the company, although managers concede that this will only happen with a form of government support.
The discussions between the government and Jingye on a taxpayer support package to help it invest in greener technology founded earlier this month after Chinese company rejected an offer of 500 million pounds from Reynolds.
Jingye was looking for up to 1 billion pounds sterling to support the 2 billion pound sterling project to close the two stoves and build two electric arc overalls instead.
