The UK government is urgently weighing emergency measures to rescue Speciality Steel UK (SSUK), a major steel manufacturer in South Yorkshire employing more than 1,400 workers, amid mounting fears the company could fall into administration following a court hearing next week.
Business Secretary Jonathan Reynolds is reportedly reviewing contingency plans, including taking SSUK into temporary public ownership. If enacted, it would mark the second such intervention in recent weeks, following the government’s move to take control of British Steel’s Scunthorpe site.
SSUK, which runs key operations in Rotherham and Sheffield, is part of the wider GFG Alliance led by industrialist Sanjeev Gupta. The group has been in financial turmoil since the collapse of its main lender, Greensill Capital, in 2021. Production at SSUK’s Rotherham plant — home to the UK’s largest electric arc furnace — has been suspended for over a year due to cash constraints, though staff wages have continued to be paid.
Gupta remains locked in negotiations with Greensill’s administrators while also facing a Serious Fraud Office investigation into suspected fraud and money laundering — allegations GFG strongly denies. He has told union representatives he is in “advanced talks with a major investor” in a last-ditch bid to avoid insolvency. However, unions say no firm details have been provided.
A spokesperson for the Community union said: “Should the worst happen next week, the government will need to step in to protect jobs and the strategically important assets.” The GMB union echoed that sentiment, backing state intervention to preserve SSUK’s operations and workforce.
Reynolds, who previously described SSUK’s workers as a “national asset,” is understood to oppose any direct financial support while Gupta remains in charge. However, officials say he is open to government involvement if the company enters administration.
One model under discussion involves placing SSUK into temporary receivership — a strategy used successfully during British Steel’s crisis in 2019. Sources suggest a sale of SSUK could be easier to achieve due to its modern electric arc furnaces, which are more environmentally efficient than traditional blast furnaces.
A Liberty Steel spokesperson said: “Speciality Steel remains a valuable business with strong demand, particularly in aerospace, defence and energy. Our plan has always been to keep it going and run it well.”
The situation presents an early test for the Labour government’s industrial policy and commitment to protecting strategic manufacturing. SSUK has recorded losses of over £340 million in the past four years, but its role in producing high-grade, low-carbon steel aligns with the UK’s net-zero ambitions and defence needs.
With the insolvency hearing set for Wednesday, the government faces mounting pressure to act swiftly to safeguard jobs and national industrial capacity in a politically sensitive region.
