UK public procurement guidance issued to help tackle steel crisis

12 November 2015

New public procurement guidance has been issued by the UK government to support British steel suppliers.

In the guidance buyers are advised to "take into account the social impacts of competing suppliers", including the effect on jobs, when issuing tenders for major projects worth £10 million or more "with a significant steel component".

The Procurement Policy Note also says contractors bidding for construction and infrastructure projects must set out how and from whom steel will be sourced. If this is not known at the award stage, steel requirements must be "openly advertised" to allow UK firms to compete.

"This will improve visibility of opportunities on major projects such as HS2 and Network Rail, so that UK steel suppliers will be able to bid," said the Cabinet Office.

The guidance, which also urges buyers to consider steel sourcing at the pre-procurement stage, applies to all central government departments.

Matthew Hancock, paymaster general and chairman of the Steel Procurement Working Group, said: "By asking procurers on major UK projects to consider social and environmental impacts, we are building a Britain that is happier, healthier and better off.

"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 bid is a British bid with all the social and economic benefits that brings."

The move follows an extraordinary meeting of the EU's Competitiveness Council on Monday, called by business secretary Sajid Javid to discuss the steel crisis.

Among a range of actions it was agreed to launch or intensify talks with steel producing countries, including China, and to "make full and timely use of the full range of EU trade policy instruments to ensure a global level playing field and to address restrictive measures in third countries in particular as regards the steel sector". The council also agreed to improve access for the EU steel industry to other markets through public procurement.

Thousand of jobs have been lost in recent months in the UK steel industry due to factors including low steel prices and cheaper imports.

"The EU steel sector suffers from major global overcapacity in production, which pushes down prices and encourages trade distorting behaviour from competing regions. High energy costs are eroding margins. And the resulting closure of steel plants is costing thousands of jobs," said the council in a statement following the meeting.