I have laid before Parliament a departmental minute setting out the particulars of a new contingent liability associated with Liberty Speciality Steels UK.
Speciality Steels UK Ltd, part of Liberty Steel Group, and the third largest steel manufacturing company—by capacity—in the UK was issued with a winding up order by the High Court on 21 August, following a petition from its creditors. SSUK employs 1,400 people across four sites in Rotherham, Stocksbridge, Wednesbury and Brinsworth. The company has now entered liquidation and the official receiver, an officer of the Insolvency Service, has been appointed as liquidator by the court.
The Department for Business and Trade has provided the OR with a letter of comfort and a letter of indemnity in respect of:
Carrying out the proper performance and duties expected as the official receiver and liquidator of the company; and
Investigating the cause of failure and identifying any asset recoveries against the company, current/former directors of the company, and any other parties; and
The winding-down of the company’s business and affairs and distributing assets of the company in the ordinary course as the official receiver's duties as liquidator.
The sudden nature of the announcement of SSUK entering into insolvency on 21 August and the urgency of the need to ensure that the OR can immediately formulate and implement a plan to address site risks, means we have sought to expedite the approval process. It has not been possible to observe the usual 14 Parliamentary sitting day waiting period for this contingent liability, since it only materialised when the company entered liquidation on 21 August when Parliament was not sitting.
On the 19 August, the permanent secretary for the Department for Business and Trade wrote to the Chairs of the Public Accounts Committee and the Business and Trade Committee, outlining our intention to provide funding for the official receiver to allow it to fulfil its statutory duties—noting the contingent liability that would be created for HMG—and asking for any objection to be notified within five working days. I can confirm that neither the PAC nor the BTC have raised any objections to the issuing of this overall funding and indemnity.
It is not possible at this stage to accurately quantify the value of the overall funding requirement with relation to the letter of comfort and letter of indemnity. The OR will assess the likely scale of any liability to Government, and costs will be reported to Parliament once a more accurate quantum is known.
HM Treasury has approved this proposal. The Department will consider any concerns raised by a Member of the House regarding this contingent liability and indemnity. If the liability is called, provision for any payment will be sought through the normal supply process.
[HCWS898]