New £500-million deal to help save British Steel
The government announced on Tuesday 17 June that it has secured a deal between Network Rail and British Steel which will help secure the latter’s future following the recent threat of closure at its Scunthorpe plant.
The deal is a five-year contract worth £500 million that will see British Steel supply Network Rail with just over 337,000 tonnes of railway tracks.
This contract forms part of Network Rail’s rail supply contracts for the provision of almost 450,000 tonnes of rail for the next 5 years, with British Steel providing Network Rail with 80% of its rail needs
The contract will begin on 1 July and builds on the government’s £2.5-billion steel fund, which was established to revitalise UK steel production over the next five years.
The remaining 20% of rail will be supplied by smaller contracts awarded to European manufacturers to ensure security of supply, the government said.
In April 2025, British Steel’s owners, Jingye Group, had planned to shut down the company’s Scunthorpe blast furnaces and other crucial operations, a move which would have crippled the UK’s steel industry.
As a result, the government intervened and took over British Steel following the passing of an emergency action in Parliament.
It said this decisive action was crutical to help secure vital manufacturing jobs and retain Britain’s capacity to manufacture its own steel.
“This landmark contract truly transforms the outlook for British Steel and its dedicated workforce in Scunthorpe, building on its decades-long partnership with Network Rail to produce rail for Britain’s railways,” said Transport Secretary Heidi Alexander.
“After taking urgent action to step in and save these historic blast furnaces from closure, we’ve now helped secure their long-term future by backing British Steel with meaningful government contracts, protecting thousands of skilled manufacturing jobs in the process.”
“This crucial investment in our railway infrastructure shows we are delivering on our Plan for Change commitment to raise living standards in every part of the UK and ensure economic growth is felt by working people in our proud industrial heartlands,” Alexander said.
