- government publishes details of upcoming steel requirements for infrastructure projects
- updated procurement guidance sets out how wider public sector is covered and the £10 million threshold removed
- changes enable UK steel manufacturers to better plan and bid for government contracts
New data published for the first time shows how the government plans to use 3 million tonnes of steel in infrastructure projects by 2020.
The information is published by Business Secretary Greg Clark and Cabinet Office Minister Ben Gummer today (13 December 2016), alongside changes to government procurement guidance to make it easier than ever before for UK steel manufacturers to plan and bid for upcoming government contracts.
Under the changes, government will start publishing their indicative future steel requirements on an annual basis, initially looking forward to 2020. It complements the new National Infrastructure and Construction Pipeline, which set out over £500 billion worth of planned private and public investment over this Parliament and beyond.
From roads to rail, defence to nuclear, the new data will show that central government infrastructure projects will need enough steel to build the equivalent of 173 Wembley stadiums – or 3 million tonnes worth of steel across 18 separate projects.
These will include the upcoming High Speed 2 rail project, the construction of Hinkley Point and for the maintenance and upgrading of the motorway system.
Business and Energy Secretary Greg Clark said:
The government has been absolutely clear that we want to do all we can to support our world-class steel industry. These changes will ensure that UK steel companies can better plan for the long term, giving them an even greater chance of securing government contracts.
We want UK companies big and small to be bidding for and winning government contracts which is why our upcoming Industrial Strategy is so important. This strategy will ensure we make the right investments in science, research, skills and infrastructure so that British industry wins contracts by producing the best goods and services.
As well as providing greater visibility on upcoming projects needing steel, procurement guidance has also been extended to include projects below the current threshold of £10 million and those from local and health authorities.
Minister for the Cabinet Office Ben Gummer said:
We will always strive to get the best value for money for taxpayers and we are going to do so in a way that strengthens our economy and bolsters the long-term prosperity of people across the country.
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.
Director of UK Steel Gareth Stace and Deirdre Fox, Chair of the Procurement and Commercial Working Group of the Steel Council said:
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.
General Secretary of Community Roy Rickhuss said:
We welcome today’s change to procurement rules as another step towards a joined-up industrial strategy that supports our steel industry. Using public sector procurement to deliver for the UK’s steel producers has been a key demand of our Save our Steel campaign and an issue we have consistently raised with government for many years.
The changes the government made last year were positive and showed they were starting to listen to the voices of steelworkers and their employers. Today’s change is a welcome improvement, which we need to see put into practice so that UK companies are winning contracts and we can continue down the path towards a sustainable future for our steel industry.
The latest updates to procurement guidance build on changes made in Autumn 2015, responding swiftly to the steel crisis, which ensured social, environmental and economic factors were taken into account in central government procurement decisions.
The aim of this was to level the playing field for UK companies bidding on government contracts and ensure issues such as skills and training are factored in when decisions are made.
Today’s updates to the procurement guidance follow further work in conjunction with the joint government and industry Steel Council.
The procurement guidance changes will not just apply to steel but other materials as well, including ceramics, cement and aluminium.
Notes to editors:
- The new procurement guidance applies to all central government departments, their executive agencies and non-departmental public bodies, which will be required to comply with this guidance for any major procurement project where steel is a critical component. There is no set value as to what constitutes a major procurement project, as this will differ between contracting agencies. It will be up to contracting authorities to determine which of their procurements are major projects.
- The revised guidance also refers expressly to the wider public sector, including local authorities and health authorities. The guidance encourages these contracting authorities to adopt the guidance where appropriate and where it does not conflict with other obligations and guidance.
- Major procurement projects are likely to include, but not limited to:
- infrastructure such as rail and roads
- construction such as the building and refurbishment of prisons, hospitals, universities, housing, community centres, bridges and schools
- flood defences
- defence related projects
- energy related projects for example new nuclear technology
- medical equipment