News: Forgemasters loan cancelled

The £80m loan offered to Sheffield Forgemasters International Ltd (SFIL) has been cancelled by the government.

The loan, together with participation in the project from Westinghouse, the nuclear power company, would have enabled SFIL to build a major new manufacturing facility for ultra heavy forgings for civil nuclear power and other markets.

Business Secretary Vince Cable said: "Sheffield Forgemasters is an important part of the UK's ability to develop a civil nuclear supply chain and its specialist forging skills are in demand globally.

"However, we have to find a balance between reducing the deficit while helping the economy to grow. Against a backdrop of reduced public spending, the Government's role is to create the right business environment and the right skills base. The Government cannot simply keep writing out cheques.

"The Government hopes the company secures private investment for this worthwhile project."

Clive Betts MP (Sheffield South East) said: "It beggars belief that the government is rejecting massive inward investment in the UK and what was a huge vote of confidence in Sheffield and UK manufacturing.

"This was not a grant, not a gift, not a subsidy – but a loan at market rates. If this project does not proceed, it will have a massive impact on investment and jobs in Sheffield, the region and the UK. It would cut exports and increase imports."

The loan follows last year's announcement of a Nuclear Advanced Manufacturing Research Centre at the Advanced Manufacturing Park in Rotherham, which will help UK civil nuclear manufactures develop world class manufacturing techniques and cost competitiveness.

SFIL are a founding member of the £25m Nuclear AMRC along with Rolls-Royce, Areva and Westinghouse. Rolls-Royce's planned civil nuclear facility will also be developed in South Yorkshire.

£13m to enable Yorkshire Forward to buy the former Outukumpu site in Sheffield for redevelopment has also been cancelled and £12m to enable the Sheffield Retail Quarter to proceed has been suspended.

Forgemasters website

Images: sheffieldforgemasters.com