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Steel public procurement guidance extended to smaller projects

Public sector bodies across the UK will now be able to consider the social and economic impact of steel purchases for projects below £10m.

The guidance – brought in for Whitehall last year and extended to the wider public sector this spring – is already used for schemes above that threshold. It was designed to help UK steel producers to compete with imports from China and elsewhere.

Now it can be called upon to justify procurement of steel, and other materials including cement and aluminium, on anything a client body decides is a “major project”.

A case study included in the guidance focused on a £6m sports centre in Lincolnshire, while the note added that road, rail and flood defence schemes were all likely to be seen as major.

A document published alongside the new guidance showed that two-thirds of the government’s known steel requirement for the next five to 10 years will be for High Speed 2.

The mega project to create a rapid rail link from London and the North is expected to use 2m tonnes by 2025.

The steel pipeline shows that the government plans to use a total of 3m tonnes over that period, although some departments did not look as far ahead.

UK Steel reacted angrily at the start of this year to what it described as “totally inadequate” duties placed on imported Chinese steel by the EU, calling them “a slap in the face” for domestic manufacturers.

Minister for the Cabinet Office Ben Gummer said today: “I don’t want contracts going abroad if the best value for money bid is a British bid with all the social and economic benefits that brings.

“By updating our procurement approach on these major infrastructure projects we are creating a level playing field for UK steel.”

The steel industry backed the procurement move but said more needed to be done to support the sector.

Director of UK Steel Gareth Stace and Steel Council procurement and commercial working group chair Deirdre Fox said in a joint statement: “This is a welcome announcement, which moves the procurement process on a step further and will ensure that more UK produced steel will be used in a greater range of government funded projects.

“These documents are a testament to the hard work of government, industry and trade unions, however clearly more work needs to be done to ensure returns improve in the coming months and years, and we look forward to working with government to achieve this shared goal.

“The steel sector also continues to take steps with the private sector to increase the level of British steel purchased.”

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