UK Government commission £1m review of Tata Steel’s extra funding request

Nation.Cymru staff

Ministers have commissioned consultancy EY to assess Tata Steel’s request for hundreds of millions of pounds in extra support for its Port Talbot plant, under a contract reportedly worth £1m, Sky News has revealed.

The request comes amid concerns that delays to an electricity grid connection could push back the opening of the site’s new electric arc furnace until late 2028 or early 2029.

According to tender documents cited by government spending tracker Bidfinder, the Department for Business, Innovation, Science and Trade awarded the contract extension during the summer.

Tata has already been awarded a £500m taxpayer grant towards the £1.25bn investment, which was intended to bring the furnace into operation by early 2028.

Sky News reported that the company expects rising project costs and lost sales resulting from the delay to substantially increase the overall bill.

The precise amount being sought has not been disclosed, but industry sources told the broadcaster it was likely to run to hundreds of millions of pounds.

Tata executives subsequently confirmed to Indian journalists that funding discussions were taking place.

The transition to electric arc steelmaking was intended to preserve 5,000 jobs across the UK, although around 2,500 roles have already been lost. Port Talbot’s last blast furnace closed in 2024.

The funding request follows a visit to the plant by Prime Minister Andy Burnham in August, when he described its transformation as “one of the biggest green industrial transition projects in the UK”.

Speaking alongside Welsh Secretary Stephen Kinnock on August 27, Mr Burnham said the UK Government was backing Tata and its workforce.

“It’s a big statement from me around the reindustrialisation of Wales and supporting Port Talbot, particularly through this crucial transition,” he said.

Cheap imports have added to the pressure on Tata’s UK operations.

Llanwern

Union leaders warned over the summer that the company’s Llanwern works in Newport was particularly exposed to larger-than-expected import quotas granted to India alongside the UK’s trade agreement with the country.

Elsewhere in the industry, British Steel was nationalised during the summer after its former owner, Jingye Group, threatened to close the Scunthorpe blast furnaces. The company is costing taxpayers £1.3m a day to keep operating.

Business Secretary Jonathan Reynolds also said last month that SSUK, the UK’s third-largest steel producer, was being prepared for government ownership after a sale process failed.

Asked about Tata’s funding request, a government spokesperson told Sky News that discussions with private companies would be commercially sensitive and declined to comment.

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