AN £80m emergency funding pot has been made available by the Government to help Tees steelworkers and their families. 

With more than 2,000 jobs at risk ministers have put together the fund to help workers retrain and start their own businesses. 

It has been warmly welcomed by the region's MPs. 

A statement said: The Government has today announced a package worth up to £80 million to support people who have lost their jobs as a result of the mothballing of SSI’s Redcar plant and invest in the future of the Tees Valley economy.

The package includes:

  • Funding for affected workers to train at local further education colleges and tailored support for them via Jobcentre Plus.
  • Finance to assist workers if they want to start up their own business and for local small businesses to grow and create jobs.

Full details of the package are being worked through and discussed with local stakeholders. The Government will also consider proposals put forward by the local taskforce being led by Amanda Skelton, Chief Executive of Redcar and Cleveland Borough Council. Business Secretary Sajid Javid and Business Minister Anna Soubry will both be attending a meeting of the taskforce in Redcar today.

Mr Javid, said: “This is an extremely difficult time for the workforce at SSI and the local community. The package we are announcing today will provide important support to workers and the local economy. Across government we will continue to focus on providing assistance where we can."

After weeks of discussions the Government revealed that the company made a last minute and unrealistic request for the taxpayer to make an open-ended funding commitment to maintain the coke ovens in Redcar.

The Government cannot accept the request. On the basis of the limited business case it was given, the Government has no confidence that this is a realistic proposal for taxpayers to support. In addition, it would be illegal and in breach of state aid rules. The company has never made a profit and the board’s proposal would do nothing to address the huge debts outstanding to local suppliers and other parties.

The Thai parent company of SSI UK has also posted on its website that it has entered "rehabilitation" under Thai law. Clearly liquidation in the UK is a risk, the statement by BIS (Dept for Business, Industry & Skills) said.

The Government will be holding a steel summit on Friday 16 October. Steel companies, MPs, trade unions, Welsh and Scottish Government representatives will be invited to look at how best to work together to find solutions to the challenges being faced in the current very difficult global market conditions. It will also start mapping out a path to a sustainable future for the industry.

Redcar MP Anna Turley thanked the Government for the funding, but she voiced grave concerns about the future of the steel plant following a move by SSI's banks to take control of assets. 

Roy Rickhuss, General Secretary of steel union Community, said:

"We have been concerned for weeks that SSI is not fit for purpose. It is clear that SSI has yet again put forward a plan to government that lacks credibility. We believe there are alternative plans and parties who could intervene to protect the industrial assets. Government's responsibility has not ended with the announcement of this support package. It should intervene to remove SSI and support an alternative approach that gives steel making an improved chance of a future.

"Government intervention is necessary to ensure that the mothballing is done safely, reduces environmental impact, retains the vital skills of the workforce and gives steel making the chance of returning in future. This is what I impressed upon the Minister Anna Soubry MP in our discussions yesterday."

It had been expected that SSI UK would enter administration this morning. This would risk even more jobs at the site which is making 1,700 people redundant. But it would have enabled a rescue plan, which has been worked up by MPs, unions and County Durham coal company Hargreaves Services, to take control of the site and keep it ticking over until steel prices recover. 

Papers filed last night on the Thai stock exchange have thrown that plan into doubt. SSI's lenders want to put the firm on a six year repayment plan to recover some of the £400m they are owned by the cash-strapped firm -  using the Redcar plant as guarantor. It would effectively place the steelworks in the hands of the banks and stymie attempts in the UK to undertake a managed closure that safeguards the site for future use and prevent it posing an environmental risk. 

Talks are continuing this morning with steel minister Anna Soubry who is in the region for a third day to find a way forward.