Government secures £500 million rail contract to protect thousands of British Steel jobs in Scunthorpe

Thousands of British steelworkers’ jobs have been safeguarded following a landmark £500 million rail contract between Network Rail and British Steel, finalised during Transport Secretary Heidi Alexander’s visit to Scunthorpe today.

Details on rail contract to secure British Steel jobs

The five-year agreement will see British Steel supply over 337,000 tonnes of track, around 80% of Network Rail’s rail needs, cementing the future of its Scunthorpe operations. This follows the Government’s emergency intervention in April to prevent the immediate closure of the plant’s blast furnaces, after owners Jingye Group announced plans to shut them down.

The contract is the first major public procurement deal since the Prime Minister recalled Parliament to pass emergency legislation saving the site. The move, along with a £500 million co-investment offer from the Government, was crucial in protecting vital jobs and British steelmaking capability.

Transport Secretary Heidi Alexander said:

“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.

“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.”

Business Secretary Jonathan Reynolds added:

“This is great news for British Steel and a vote of confidence in the UK’s expertise in steelmaking, which will support thousands of skilled jobs for years to come.

“Following our decisive action to step in and save steelmaking at Scunthorpe in April, this contract will give the sector the security to supply the steel we need for the infrastructure of the future, as part of our Plan for Change.”

The deal also complements a new UK–US trade agreement that reduces tariffs and supports key sectors, including steel. The UK remains the only country to have secured such a deal.

British Steel’s Commercial Director for Rail, Craig Harvey, said:

“We’re exceptionally proud to be extending our long-term strategic partnership with Network Rail with an agreement demonstrating British Steel’s importance to the UK’s economy and infrastructure.

“The contract represents a huge vote of confidence in UK workers and British industry, underpinning the vital role we play in ensuring millions of passengers and freight operators enjoy safe, enjoyable, and timely journeys on Britain’s railways.”

Network Rail’s Group Director for Railway Business Services, Clive Berrington, noted:

“We are committed to buying British where it makes economic sense to do so and British Steel remain extremely competitive in the provision of rail and will remain our main supplier in the years ahead.”

Additional smaller contracts will be awarded to European manufacturers for specialist rail products, expected to total 80,000–90,000 tonnes.