The United Kingdom’s steel industry, already battered by years of uncertainty, was thrust into fresh turmoil this week as Speciality Steel UK—a major division of Sanjeev Gupta’s Liberty Steel Group—collapsed into government control. The move, finalized on August 21, 2025, by a London judge, has put the future of roughly 1,500 workers in Yorkshire and South Yorkshire in limbo and reignited debate over the fate of one of Britain’s most vital industrial sectors.
The compulsory winding up order, granted in response to a petition from creditors owed hundreds of millions of pounds, marks a dramatic intervention by the government. According to BBC News, Speciality Steel UK, which uses scrap metal to manufacture steel and supplies critical materials to the aerospace, defence, and power generation industries, was described by the court as “hopelessly insolvent.” The firm, with only £650,000 in its bank account, was facing debts in the millions and reportedly losing around £9 million (about $12.1 million) every month.
As part of the court’s order, the company will be placed under the stewardship of a government-appointed liquidator and special managers from the consultancy firm Teneo. The UK government has agreed to cover ongoing wages and operational costs to keep the plants running while a buyer is sought. This step, while offering some immediate relief, has done little to quell anxieties among workers and their families.
South Yorkshire’s mayor, Oliver Coppard, voiced both concern and cautious optimism in a statement: “The news about Liberty Steel is difficult, but offers the opportunity for clarity and a path forward. There is and will continue to be a period of uncertainty for workers at Liberty’s two sites in South Yorkshire.” Coppard underscored the need for urgency, adding, “I now want to see swift progress from government to safeguard the unique steelmaking capabilities we have here in our region. I will be seeking a conversation with ministers as a matter of urgency and will do everything I can to make sure that workers at Liberty Steel and the steel industry that is so integral to our identity have the brightest possible future.”
The government’s own messaging echoed these sentiments. A spokesperson stated, “We know this will be a deeply worrying time for staff and their families, but we remain committed to a bright and sustainable future for steelmaking and steelmaking jobs in the UK.” The statement was welcomed by Coppard, who stressed the importance of government action to secure the long-term viability of steelmaking in the region.
The collapse of Speciality Steel UK comes amid a broader period of instability for the UK’s steel sector. Only months earlier, in April 2025, the government intervened to take over British Steel’s Scunthorpe plant, aiming to prevent its closure by Chinese owner Jingye. This pattern of state intervention has sparked fresh debate about the government’s role in safeguarding key national industries.
Unions have been quick to respond. Sharon Graham, general secretary of Unite, called on ministers to provide “long-term guarantees” to protect both jobs and the company itself. “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, according to BBC News. Graham also emphasized the critical role Liberty Steel plays in the UK’s economy, particularly its supply of specialized steel for blue-chip clients in the aviation sector.
Echoing these concerns, Charlotte Brumpton-Childs, GMB National Officer, described the situation as “another tragedy for UK steel—and the people of South Yorkshire—this time brought on by years of chronic mismanagement by the owners.” She argued that the crisis represents “an opportunity for the Government to take decisive action, as it did with British Steel, to protect this vital UK industry.”
For its part, Liberty Steel’s leadership has been vocal in its opposition to the winding up order. Jeffrey Kabel, the company’s chief transformation officer, called the court’s decision “irrational,” insisting that a viable commercial solution had been available. Kabel explained, “The decision to push Speciality Steel UK into compulsory liquidation, especially when we have support from the world’s largest asset manager to resume operations and facilitate creditor recovery is irrational. The plan that GFG (Sanjeev Gupta’s parent business) presented to the court would have secured new investment in the UK steel industry, protecting jobs and establishing a sustainable operational platform under a new governance structure with independent oversight. Instead, liquidation will now impose prolonged uncertainty and significant costs on UK taxpayers for settlements and related expenses, despite the availability of a commercial solution.”
Speciality Steel UK’s collapse is the latest in a series of setbacks for Gupta’s GFG Alliance, which has been scrambling to refinance its global operations following the 2021 insolvency of its major backer, Greensill Capital. The group, which also has steel, aluminum, and energy interests in Europe, Australia, and the United States, has faced persistent questions about its financial stability and governance.
The government’s intervention has not quelled concerns about the long-term future of steelmaking in Britain. Industry observers note that the sector has struggled for years with high energy costs, global competition, and the challenges of transitioning to greener technologies. The fate of Speciality Steel UK’s 1,500 employees—most of whom are based at the company’s sites in Rotherham, Sheffield, and Stocksbridge—now hinges on the government’s ability to find a credible buyer willing to invest in the business and secure its future.
Some see a glimmer of hope in the government’s willingness to step in and cover wages and costs, at least in the short term. Others, however, worry that this approach merely postpones tough decisions and could saddle taxpayers with significant liabilities if a buyer cannot be found. There is also the broader question of whether repeated government interventions risk creating a climate of dependency rather than fostering a competitive and sustainable steel industry.
For now, the official receiver and Teneo’s special managers face the daunting task of keeping the business afloat while navigating complex negotiations with potential buyers, creditors, and government officials. As the search for a new owner begins, the experience of British Steel’s Scunthorpe plant—where government action helped avert closure—offers both a precedent and a warning.
As the dust settles, the fate of Speciality Steel UK remains uncertain. What is clear is that the government, unions, and local leaders alike recognize the importance of steelmaking to the UK’s industrial identity and economic future. Whether this latest crisis will prompt a lasting solution or simply mark another chapter in the industry’s long struggle remains to be seen.
