UK spending watchdog warns over cost of funding British Steel

LONDON – Britain has spent 377 million pounds ($500 million) supporting British Steel over nine months, the country’s spending watchdog said, with no certainty about how long the aid will continue or if it will be repaid.

In April 2025, the government took operational control of British Steel from its Chinese owners, Jingye, to protect the UK’s last remaining primary steelmaking facility and safeguard thousands of jobs.

The National Audit Office (NAO) said Monday that the cost of government intervention is expected to exceed 615 million pounds by June. It added that funding ongoing support may require cuts elsewhere.

Key findings from the NAO include:

Britain’s Department for Business and Trade (DBT) spent 377 million pounds between April 12 and January 31, with no budget set at the 2025 Spending Review and no end date for the support.

Ongoing operations cost the government roughly 1.3 million pounds per day, with total support projected to reach 615 million pounds by June.

Although DBT has classified the support as a loan, there is no set budget or repayment schedule. The NAO warned it is unclear if British Steel will be able to repay the funds.

The support has preserved jobs and aided UK infrastructure and construction projects. However, the NAO highlighted the high cost and uncertainty over how long government backing will continue, recommending that DBT learn from this experience to better manage future interventions.

A government spokesperson said: “Last year we protected thousands of jobs by saving British Steel from collapse, and we are determined to support British steelmaking now and for generations to come. We update Parliament on British Steel every four weeks, including spending, and continue discussions with Jingye to find a pragmatic, realistic solution for its long-term future.” -Reporting by Sarah Young, Editing by Paul Sandle/Reuters