‘Buy UK steel guidance’ needs to go further, says CPA

The government could go further in shoring up the beleaguered steel industry, according to the Construction Products Association.

The CPA was reacting to news today that business secretary Sajid Javid had extended the scope of last year’s guidance on steel procurement to include local authorities and the NHS.

In early November, following threats to the UK steel industry, central government departments commissioning projects and infrastructure projects over £10m were encouraged to buy British steel.

These guidelines, now extended, say that public sector clients have to consider the social and economic impact on the UK before buying steel from abroad.

The new, wider scope will also apply to all projects over £10m, with clients expected to consider the carbon footprint of sourcing and transporting construction materials from overseas, as well as social concerns such as the health and safety of suppliers’ staff.

Speaking about the new guidelines cabinet office minister Matt Hancock, in charge of public procurement policy, said: “We are going further than ever before to support British steel. Taxpayers spend billions of pounds buying steel for public projects.

"Last year we changed the rules across all central government procurement to ensure buyers take into account the true value of British steel – including local impact and jobs.

“The industry is responding positively to this so I want to go further. Now we will apply this guidance across the public sector so that, from operating theatres to new buildings, public sector buyers will need to consider social and economic benefits, alongside value for money. When public bodies buy steel they must take account of the true value of buying British.”

But the CPA said that while the government’s actions to aid the steel industry are “commendable”, there is still more to be done.

A CPA spokesman told Construction Manager: “We question whether such guidelines will be prove even modestly effective. The language used is a giveaway; to require the public sector to ‘consider the social and economic impact of the steel they source across all major projects’ is vague enough so that nearly any procurement manager should be able to meet this requirement.

“If the government really wants to address the problems facing the UK steel industry, then it must answer how it will help control Chinese products being dumped into the EU, together with the high cost of energy that for some large UK manufacturers results in paying 54% more than their EU competitors.”

According to the latest Department for Business, Innovation & Skills, the price for fabricated structural steel fell by 8.6% in the 12 months to January 2016, mainly attributed to the low cost of imported steel from China.

Elsewhere, the National Federation for Builders (NFB) has also weighed in on the news by stating that consistency is needed in procurement across all sectors in the construction industry.

Richard Beresford, chief executive of the NFB, said: “If value for money is really at the heart of the government’s procurement strategy, then we are confident that the government will see the social and economic benefits of applying these principles across all procurement, and not just steel.”