Tata Steel employees and suppliers will receive £13.5 million in emergency funding during the restructuring of Port Talbot

The UK Government has announced the release of £13.5 million in emergency funding to support businesses and supply chain workers affected by Tata Steel’s restructuring plans at its Port Talbot site in South Wales.

The funding marks the first allocation from a transitional administration set up to manage the effects of Tata’s shift from traditional blast furnaces to more environmentally friendly electric arc furnaces, which could lead to the loss of up to 2,800 jobs.

Tata Steel, which is closing one of its two blast furnaces in Port Talbot and will close the second early next month, is moving to less carbon-intensive steel production. The move is part of a wider £750m investment in green steel, supported by a £500m government package agreed last year. However, the new electric arc furnace is expected to employ fewer workers and will take years to become operational.

In addition to the emergency funds, the government and Tata have set up a transition council, co-led by trade unions, with access to £100 million aimed at skills development and local regeneration, of which £80 million will come from the state and £20 million from Tata. This initial funding is intended to help local companies, which rely heavily on Tata as their main customer, diversify into new markets and customers. It will also provide support to workers affected by the transition, helping them find new employment opportunities, training and skills development.

Jo Stevens, the Welsh secretary and chair of the transition council, will formally announce the £13.5 million funding on Thursday. Stevens, who has a personal connection to the steel industry through her childhood near the Shotton Steelworks, stressed the importance of avoiding the devastating consequences of past mass redundancies.

As part of the ongoing negotiations, Labor has called on Tata to consider retaining one blast furnace until the new electric arc furnace is operational. However, Tata has rejected this proposal, citing higher costs to taxpayers. Labor has also pledged a £3 billion “green steel fund” to support the industry’s transition, building on the £500 million support package already agreed.

Stevens is expected to visit local manufacturers and Tata suppliers during her announcement, further underscoring the Government’s commitment to securing a sustainable future for Port Talbot’s steel industry. More announcements on further funding tranches are expected in the coming weeks.

The emergency funding initiative has received support from more than fifty local businesses and institutions, including the Royal Mint and Cardiff Metropolitan University, who have pledged to help workers displaced by the steelworks transition.