UK steelmakers and MOD have landmark opportunity to secure industry-Government partnership

2 May 2024

UK Steel has identified a crucial opportunity to develop the industry-Government relationship with the Ministry of Defence (MOD) and secure the strategic supply of UK-made steel for the defence sector in a paper published today. 

The UK steel industry wants to make a significant contribution to national supply chain resilience, bringing the procurement of key materials closer to home and reducing the UK’s dependence on foreign companies. It is crucial that we get this relationship right for the long-term requirements of the country’s defence industry – from specialist-grade steels to the defence estate. 

The problem 

James Cartlidge, Minister of State for Defence Procurement, said in April that resilient supply chains and the onshoring of our manufacturing capability are critical to ensuring we have effective oversight and control of critical defence contracts. 

Sources including the Defence Select Committee and the Royal United Services Institute (RUSI) have put a spotlight on flaws in MOD procurement practices. The Defence Select Committee highlighted that the relationship between suppliers and the MOD are “not anywhere close to where it needs to be”. 

RUSI identified that offshoring the steel supply chain will increase reliance on other countries that, in times of pressure or conflict, may not have capacity or willingness to supply to the UK. RUSI warned that a “further loss of steel capability risks the sector’s ability to regenerate, putting at risk the supply and price of a core intermediate good for the economy and for the military”. UK Steel and its members stand ready and willing to play our full role in supplying the materials needed for our national defence priorities and security. 

It is likely that MOD procurement officials do not realise that the United Kingdom has a range of domestic steel producers and suppliers with the capacity to produce key products for defence and security of national supply. 

The solution

UK Steel’s position paper outlines a template to strengthen the supply UK-made steel into MOD, highlighting that: 

• The industry should be represented at key points on the Defence Suppliers Forum
• There is a need to formalise pre-procurement dialogue to demonstrate UK steelmakers’ capacity and capabilities
• Steel should be recognised as a strategic asset as the industry is essential to national security for domestic supply
• The MOD should follow best practice set out by other Departments to adhere to the Government’s own Procurement Policy Note for Steel

UK Steel has endeavoured to set out a top-line look at products UK steelmakers can supply. 

We are prepared for a serious and open discussion to establish future requirements – both defence-grade and otherwise – and gain a realistic assessment of how the UK steel industry can contribute to our nation’s security needs. 

The aim of developing and sharing this capability review and policy recommendations is to begin to address the historical issues identified by the Defence Select Committee and others that have previously prevented the optimum relationships between this key ministry and our steel industry, and strengthen our domestic industrial capability for the benefit of all.