Sheffield Forgemasters - Business, Innovation and Skills Committee Contents


1  Introduction


Background

1. On 17 March 2010, the previous Government announced that it would be providing a loan of £80 million out of the Strategic Investment Fund and the Low Carbon Fund to Sheffield Forgemasters, a private company which specialises in a broad range of heavy steel forgings and steel castings.[1] The loan would facilitate the development of a 15,000 tonne press to make large components for the civil nuclear industry. Announcing the loan, Lord Mandelson, the then Secretary of State for Business, Innovation and Skills said that:

    Forgemasters makes heavy-forged castings for advanced engineering projects - especially in the civil nuclear supply chain. There are just one or two other companies in the world with the kind of capability the new forge will provide and the accreditation needed to supply the global nuclear industry - and no others in Europe.[2]

2. The loan was the result of lengthy discussions between the Department and the company which began with an initial application for Government support from Sheffield Forgemasters in September 2008.[3]

3. When it came into office, the Coalition Government undertook a review of all spending commitments made by the previous Government in the period between January 2010 and the General Election. 217 projects were submitted to the Treasury for re-approval, including the £80 million loan to Sheffield Forgemasters. On 17 June 2010, Danny Alexander MP, the Chief Secretary to the Treasury, announced to the House the outcome of that review. Twelve of the 217 projects were cancelled, and a further 12 projects were suspended.[4] The loan to Sheffield Forgemasters was one of the twelve projects which were cancelled.

4. The cancellation of the loan attracted significant interest both in the House and in the media with accusations being levelled at both the current Government and the previous Government over the handling of the loan. We wrote to the Secretary of State to get a clearer picture of the arrangement of the loan and the rationale underpinning its withdrawal. The Secretary of State replied on 28 July, and gave oral evidence before us on 14 October. This evidence is appended to our Report.


1   www.sheffieldforgemasters.com Back

2   webarchive.nationalarchives.gov.uk/+/http://www.bis.gov.uk/news/speeches/mandelson-ninj-conference Back

3   HC Deb, 29 June 2010, col 539-40W Back

4   HC Deb, 17 June 2010, col 1040 Back


 
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