The cost to taxpayers of keeping production going at British Steel’s Scunthorpe blast furnace could exceed £1.5bn by 2028.

Spending watchdogs at the National Audit Office said the Government has spent £377m so far to keep the site operational.

The Department for Business and Trade (DBT) intervened last April after its Chinese owner Jingye threatened to close the loss-making site.

The NAO said shutting the site would have resulted in a large number of job losses at Scunthorpe and affected key customers in the supply chain including the construction industry.

DBT has so far spent £377m to keep British Steel operating, including spending £15m on advisers between 12 April 2025 and 31 January 2026, and £359m to British Steel for operating activities such as paying for raw materials, payroll, and other operating costs.

Spending is expected to reach £615m by June 2026 and if it continues at current rates, it could exceed £1.5bn in 2028.

DBT has no repayment schedule in place, and it is not apparent that British Steel will be able to repay the loan.

Gareth Davies, head of the NAO said: “DBT was able to act quickly to save British Steel’s Scunthorpe furnaces from closure, avoiding heavy job losses and serious impacts on major UK infrastructure and construction projects. However, the trade-off is the significant cost of maintaining operations, and uncertainty over how long this will continue.”

“DBT should learn from this experience to be better prepared for future interventions.”