Wednesday, December 16, 2015

News: £9m support package hope for city region hit by Tata Steel redundancies

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A joint action plan to support the Sheffield city region in the wake of the proposed restructuring at Tata Steel is aiming to secure £9m.

Rothbiz reported earlier this month that representatives from across the city region were putting together a joint action plan as the Indian-owned steelmaker forged ahead with its latest restructuring proposals.

Tata Steel has for a long time been warning that continuing cheap imports risk undermining Europe's steel industry and that uncompetitive energy costs and the strength of sterling are hurting its UK operations.

The company recently confirmed proposals affecting 1,200 jobs, mainly in Scunthorpe and Scotland. It follows the announcement in July of a restructure of its speciality and bar business to focus on high-value markets such as aerospace - a move that has put 720 jobs are at risk, many in Rotherham.

With Tata Steel rejecting alternatives and confirming that the restructure will go ahead, politicians and business leaders met last week and now details of the support has been announced. The package will help individual workers facing redundancy and supply chain businesses likely to be hit hard in Rotherham and the whole city region, as well as supporting other local companies to create jobs.

Cllr. Chris Read, leader of Rotherham Council, has the backing of the Sheffield City Region Local Enterprise Partnership (LEP) – which comprises representatives from the public and private sectors – for a comprehensive joint action plan focusing on improving trading conditions for UK steel producers, helping supply chain companies to diversify and grow into new markets, and providing specific support for affected employees and the community.

The plan combines locally-driven support packages – such as training and development for those at risk - with a call for the Government to invest and give more support to the steel and other industries struggling to compete in the face of massive energy costs, business rates and the strong pound.

A local task group is shaping the plan and co-ordinating its delivery, with input from Rotherham Council, Sheffield City Region LEP, the Sheffield City Region Combined Authority, UK Steel Enterprise the regeneration subsidiary of Tata Steel, Government agencies including JobCentrePlus and the Skills Funding Agency, Barnsley and Rotherham Chamber, trade unions and Tata Steel.

John Healey MP, whose constituency includes Tata's Aldwarke site, called on the Government to give extensive support to Rotherham and demanded the Chancellor announce action to help the steel industry in the city region after up to £9m of support from the government and Tata was announced to support Scunthorpe steel workers and the local economy. He was due to meet Anna Soubry, Minister for Small Business, Industry and Enterprise yesterday.

The Local Enterprise Partnership (LEP) and the Combined Authority have acknowledged that dealing with the fall-out of Tata Steel's trading challenges is a priority given that it is estimated that over 1,000 suppliers to Tata Steel are in the Sheffield city region.

Much of the activity contained in the plan will be funded through money devolved to the SCR to respond decisively to events such as the Tata Steel announcement. However, local partners have expressed their expectation that Government funds will be made available to match local resources, as has happened elsewhere in the country.

UK Steel Enterprise has pledged £1.55m of support for job creation. In addition the partnership group is calling for £2.5mm in funding from central Government to help employees and companies affected across the city region. A further £1.5m is being sought from the Government's deregulated skills budget, and would be used to prepare former steelworkers for jobs in other industries, or to set up their own small business.

The LEP at its December 7 meeting indicated that businesses affected can access financial support from its £52m Business Investment Fund.

Cllr Read said: "Workers in Rotherham who are facing redundancy will want to know that we are doing everything to support them and help them back to work. This is a very difficult time for them and their families and I am determined that we will do all that we can.

"Companies in the supply chain will feel the impact too, and we will also be working to support these businesses, and their employees, as a key part of this plan."

Keith Williams, UK Steel Enterprise Regional Manager, added: "We are committed to supporting the communities affected and to helping businesses grow and create new jobs.

"We are working closely with local partner organisations and welcome proposals or projects which can create jobs, from both business support organisations and from private companies."

Over 2,000 people are employed by the company in South Yorkshire where sites like Stocksbridge in Sheffield and Aldwarke in Rotherham, focus on exceptional high-value products and sectors. Rotherham is also the location for the manufacture of speciality steel and for the Proving Factory - a £22m government-backed manufacturing initiative working on low-carbon vehicle technologies.

The LEP is also looking at supporting the business case with financial support to secure the long term future of two R&D groups that were set to move out of Rotherham. It would see 70 jobs remain in the area.

James Newman, chair of the Sheffield City Region Local Enterprise Partnership, said: "Tata Steel is one of our largest employers and is therefore very important to the long-term future of the Sheffield City Region. The LEP has agreed to work with Tata Steel to make sure that both individuals and businesses are supported through the powers and funding available to us in our Growth and Devolution Deals."

Tata Steel website

Images: Tata Steel

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