The UK government has announced new procurement rules that will prioritise domestic steel in public contracts, as part of a broader strategy to strengthen national security and supply chain resilience.
Under the new guidance, steel, shipbuilding, artificial intelligence (AI) and energy infrastructure have been designated as critical sectors, with government departments encouraged to favor British suppliers where necessary.
A key element of the policy is a new requirement for public bodies to use British steel or justify sourcing from overseas, reinforcing support for the domestic steel industry. The measure aims to ensure that public spending contributes to local production, jobs and industrial capacity.
Supply chain resilience in focus
The government stated that recent global developments have highlighted the fragility of international supply chains, increasing the importance of domestic production in strategic sectors.
The new framework is intended to:
- strengthen economic security,
- support resilient supply chains,
- ensure long-term industrial capacity in key industries.
The government is also introducing a Public Interest Test for contracts above £1 million, requiring departments to assess whether services should be delivered in-house rather than outsourced. This test will apply to more than 95 percent of central government contracts by value, marking a significant shift in procurement policy.
In addition, UK-based steelmaker British Steel said, “For the first time, the UK Government is introducing clear guidance on how departments can protect the UK’s economic security and build resilience in four critical sectors. This guidance will ensure the government does everything in its power to facilitate strong and sustainable industry in the UK.”
Welcoming this announcement, UK-based trade association UK Steel stated that public procurement is one of the most powerful levers government has - and using it to back British industry is essential to securing long-term capability in strategically important sectors like steel.