Sheffield Forgemasters: Deloitte consultancy firm paid £458,000 for role in £2.58m Government buyout
The Government paid a consultancy firm nearly half a million pounds for its role in the sale of Sheffield Forgemasters in July.
The historic city firm was acquired by the Ministry of Defence for £2.58m in the summer.
After years of talks, the major Sheffield employer was nationalised in an effort to shore up the company so it can continue manufacturing steel for defence projects like the Trident nuclear submarine fleet.
Now, The Star can reveal that consultancy firm Deloitte, which was hired to assist in talks over the acquisition, was paid £458,000 – not including the 20 per cent VAT – for its role in the deal.
The firm has been scrutinised in the past 18 months for receiving hundreds of millions of pounds in contracts under the Conservatives.
This includes at least 26 contracts worth up to £278.7m that the Government awarded to support the rollout of the UK’s controversial and expensive test-and-trace programme.
MPs have criticised the Government for its prolonged and continuing use of consultants during and after the pandemic.
Deloitte itself recorded record annual profits last week, rising to £4.49bn in the 12 months to the end of May. The Financial Times reported that the firm’s 691 equity partners would each receive an average bonus of £854,000.
The Star also understands the contract for Sheffield Forgemasters – which is worth a fifth of the price paid for the firm – involved the input of nine partners, nine directors, 10 assistant directors and nine managers.
The Ministry of Defence and Deloitte have been approached for comment.
Following the sale in July, the manufacturer’s chief finance officer Stephen Hammell said the move was ‘very positive news for the city’ and staff.
"At the heart of the deal announced today is the intention to invest up to £400m on site to develop our ability to support defence,” Mr Hammell said.
“That’s great news for our employees and our customers.
“This will transform our capabilities over the course of the next 10 years.”
The CFO said talks about the nationalisation of Sheffield Forgemasters has been taking place for over two years and the deal was agreed on the grounds that the Government invests £400m in replacing and upgrading much of its machine shop and forging equipment.