The government has assumed control of Sanjeev Gupta’s biggest steelmaking operation in a dramatic intervention that leaves it overseeing more than half of Britain’s steel industry.
On Thursday, the official receiver stepped in to take charge of the Rotherham steelworks in South Yorkshire after the High Court approved a winding-up petition from creditors. The ruling forced Gupta’s Speciality Steel UK (SSUK) into administration, raising the prospect of closure for a plant that employs 1,500 workers and is home to one of Britain’s few “green” electric arc furnaces.
The Labour government said it acted to safeguard jobs and stabilise production, but the move comes at significant cost. Monthly wages at the site total £4 million, meaning taxpayers will fund tens of millions of pounds in operating expenses until insolvency specialists Teneo can secure a private buyer. The official receiver, an independent arm of government, has stressed it intends to reclaim these costs through an eventual sale.
The decision deepens the state’s role in steelmaking following April’s takeover of British Steel from its Chinese owner and a £500 million subsidy for Tata Steel’s green transition in Wales. More than half of the UK’s 5.6 million tonnes of annual steel output is now effectively state-run.
Unite general secretary Sharon Graham said ministers must be prepared to run SSUK indefinitely if no suitable buyer emerges. “If the right buyer cannot be found then the Government should be prepared to run the company itself and ensure it is ready to meet the challenges of the future,” she said.
Community, the steelworkers’ union, called the ruling a “worrying development” and urged clarification over job security.
The collapse of SSUK marks another blow for Gupta, once hailed as the “saviour of steel”. His global Liberty Steel empire expanded rapidly after 2010 through acquisitions, financed heavily by Greensill Capital. Greensill’s collapse in 2021 left Gupta’s companies exposed, triggering investigations by the Serious Fraud Office. He denies any wrongdoing.
SSUK owes more than £200 million to creditors including UBS and Greensill’s administrators. In court, Gupta requested another month to finalise his own rescue plan but was rebuffed. His lieutenant, Jeffrey Kabel, branded the judge’s ruling “irrational”, saying: “The taxpayer will now be running a business that could have been funded privately.”
SSUK produces specialist steels for aerospace and defence but operations have been mothballed for months due to lack of funds. The High Court heard the company did not even have enough money to meet this week’s payroll.
The loss of output has already forced supply chain gaps to be filled by imports. Gareth Stace, director-general of industry body UK Steel, said: “The Government needs to protect the industry from unfair trade and high energy costs so that the Speciality Steels business, and the rest of the UK steel ecosystem, is sustainable.”
The intervention highlights the tightrope for Rachel Reeves, the chancellor, as she juggles her pledge to rebuild Britain’s manufacturing base with the fiscal pressure of supporting unprofitable industries. Steel employs around 37,000 people in the UK and contributes 0.8 per cent of manufacturing output.
For ministers, Rotherham is a gamble: stabilise the plant, find a buyer, and protect skilled jobs—or risk accusations that the state is throwing good money after bad in an industry already in structural decline.
