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Community backs Steel Charter

20th May 2019

The UK’s steel industry launched the ‘UK Steel Charter’, an important new initiative aimed at maximising the amount of UK produced steel used in UK construction and infrastructure projects. With just over half of all the steel used in UK construction projects, 6 million tonnes annually, currently coming from abroad, the potential to purchase more steel from UK producers is significant and would boost steel production, support steel jobs and communities, strengthen manufacturing supply chains, and increase UK GDP. The steelworkers’ trade union, Community is backing the charter.

The UK Steel Charter, building upon existing government policy in this area, asks organisations including government departments, devolved administrations, local authorities, and major infrastructure projects to sign up and commit to a range of simple procurement steps. These simple steps could transform the way the UK purchases steel and other materials, ensuring decisions aren’t simply made on the basis of ‘lowest upfront cost’, but take into account longer term strategic aims such as social and environmental considerations, and the UK’s long-term economic growth. The steps will inject real transparency into procurement practises, maximising the ability of UK steel producers to compete for and win supply contracts.

The public sector, and ultimately the taxpayer, is the single biggest purchaser of steel in the UK. UK Central Government alone is projected to purchase £2.5 billion worth of steel in the next five years, for rail, roads, schools, hospitals, ships and much more besides. Huge volumes will also be required for massive private sector projects like Heathrow, Hinkley C and the expansion of our offshore windfarms. Data published this year by BEIS showed that 43% of steel purchased by Government last year was from UK producers, 42% was imported with the remainder being of unknown origin. This provides Government and the steel sector with an excellent starting point to build upon and the potential for big improvements.

Commenting on the launch of the UK Steel Charter, Community’s General Secretary Roy Rickhuss said:

“This is an important initiative and a welcome step forward to support our steel industry. Steel unions have long-campaigned for government at all levels to maximise the procurement opportunities for UK steel producers. I hope that the charter will be widely used and adopted and the positive examples of good procurement practice are followed. Procurement remains a vitally important part of any joined-up industrial strategy, and, along with tackling issues such as industrial energy costs, must be part of any sector deal. What is needed now is the political will to make procurement work for our industry – the Steel Charter sets out how this can be achieved.”

UK Steel Director Gareth Stace said:

“I am incredibly proud that my organisation is launching the UK Steel Charter. We have worked hand in hand with the UK, Welsh and Scottish Government’s in recent years to change the way steel is procured in this country, much progress has been made but we know more can still be done.

“This initiative will encourage as many organisations as possible to take a more proactive and thoughtful approach to their procurement of steel in the future, and importantly publicise the exemplar approach that many organisations are already taking.”

“UK public procurement accounts for a massive 14% of UK GDP each year, its decisions are therefore a hugely important policy tool and perhaps the most significant intervention the Government makes in the economy. Government procurement decisions are important in themselves but also as a driver and catalyst for positive change elsewhere in the economy. It is therefore essential that a more strategic and long term approach to procurement is developed, sitting at the heart of the Industrial Strategy.

“I am hugely excited about the potential of this Charter, not just to the supply and production of steel in the UK, but the wider impact it can have on jobs, communities and UK industry as a whole.”

May and June will see a series of events taking place, with organisations making commitments to the UK Steel Charter, this includes the Scottish Government, local authorities, and a range of private sector organisations including RenewableUK and UK Onshore Oil & Gas. The Welsh Government signed up to the Steel Charter at an event in Shotton last week (pictured).

Business minister Andrew Stephenson signed the charter at a Parliamentary launch, where Community’s General Secretary, Roy Rickhuss was one of the speakers. The Business Energy and Industrial Strategy department was the first major signature at national government level.

Read more about the charter here.