Government and Tata Steel to provide support to Scunthorpe steel workers and local economy
The Government and Tata Steel have announced an initial support package of up to £9 million to support the local economy and employees affected by the proposed restructuring and job losses at the Scunthorpe steelworks.
Tata Steel's regeneration arm UK Steel Enterprise has pledged £3 million to support job creation in Scunthorpe, on top of £10 million it has already earmarked to help regenerate UK steel communities over the next five years.
The new £3 million funding is being matched by the UK Government. It will provide support for more start-up businesses and companies that are looking to expand and create jobs.
In addition, the Government is separately providing up to £3 million specifically for training of affected employees through local further education colleges.
The Government has asked Baroness Liz Redfern, leader of North Lincolnshire Council, to lead a taskforce which will identify local needs, co-ordinate with UK Steel Enterprise and consider whether additional support may be necessary.
Business Secretary Sajid Javid said:
"This is a very difficult time for the workforce, so it is important that the Government and the company have come together to support people and the local economy.
"The Government has no intention of simply standing aside whilst the steel industry faces global challenges on a scale unprecedented in recent years. We will do everything we can to help workers and to ensure a level playing field for the industry.
"Tata Steel has a strong track record of creating jobs and supporting local communities right across the country, and its commitment to this package today is to be commended."
Tata Steel's UK Steel Enterprise is also providing an additional £1.5 million to support job creation in steel communities around its Dalzell and Clydebridge sites in Scotland. The UK Government is continuing discussions with the Scottish Government about further support.
Karl Koehler, Chief Executive of Tata Steel's European operations, said:
"I recognise this is a challenging time for the employees affected by the restructuring we announced.
"We are committed to doing everything in our power to support those impacted and through UK Steel Enterprise we will help create new jobs in the affected local communities.
"The UK steel industry is facing extremely challenging circumstances and we welcome the Government's pledge to match our funding package for those affected."
Lady Redfern, chair of the local taskforce, said:
"We have been really well supported, with ministers, right up to the Prime Minister and the local MP's, particularly Andrew Percy who has worked with us to create our list of asks from Government.
"The £9 million announced today by the Government and UK Steel Enterprise will provide a significant boost to the North Lincolnshire economy. We intend to work quickly to help people who have lost their jobs to ensure that every element of support is available, whilst at the same time encouraging new businesses to start and grow in North Lincolnshire.
Over the last four decades Tata Steel's UK Steel Enterprise has helped to regenerate local economies with £88 million of support and created more than 75,000 new jobs across the UK.
Notes to editors
Statutory redundancy costs are not included in this package and would fall to the company to fund.
Last week, the Government held a high-level Steel Summit which led to the creation of three working groups each chaired by a separate Minister to urgently identify joint work in three key areas. These held their first meetings this week.
Public procurement – the ambition is to drive up the number of contracts won by UK steel manufacturers in fair and open competition. This working group is chaired by Matthew Hancock MP, Minister for the Cabinet Office.
International comparisons – to consider what lessons can be learned from other countries in the EU and beyond. This working group is chaired by Business Minister Anna Soubry.
Competitiveness and productivity – to look at energy and environmental costs, business rates, regulation and what action industry can take to drive up their competitiveness including skills, training and maximising their assets. This working group is chaired by the Commercial Secretary to the Treasury, Lord O'Neill.