William Eichler 22 May 2019

British Steel’s financial troubles could cost councils nearly £3m

British Steel’s financial troubles could cost councils nearly £3m image

Local authorities could lose £2.8m in business rates should British Steel go into administration, a real estate company has calculated.

The UK's second-biggest steel maker has been trying to secure £30m of emergency funding from the Government to prevent it going under in the face of Brexit, weak demand and expensive raw materials.

If the company were to go into administration, 5,000 jobs would be at risk and 20,000 jobs in the supply chain would be endangered.

It would also cost local authorities around £2.8m in business rates, according to Colliers International.

This would hit some of the UK’s most deprived areas, such as Scunthorpe and Port Talbot. It would also affect South Killingholme and Redcar and Cleveland.

‘British Steel’s predicament mirrors other UK manufacturers trying to balance the uncertainties surrounding Britain’s planned exit from the EU, a reduction in demand and higher costs,’ said John Webber, head of rating at Colliers International.

‘British steelmakers pay some of the highest green taxes and energy costs in the world and are saddled with high labour costs and business rates.’

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