The Premiership club were willing to pay Gilroy's wages while he was on loan with the Iron, but decided against keeping him with the club - he has played twice for the reserves.
Meanhile Greg Strong, who joined United on loan from Hull City this week, believes that new Mudrats manager Peter Taylor is not giving players who were already at the club a chance to impress.
Strong joined the Tigers from Motherwill in the summer, and suffered an injury after playing just two games.
14 weeks later he returned, and found that his chance to impress had gone.
He told the Scunthorpe Telegraph: "There was a new manager and he was bringing in new players - all of a sudden I was out of the picture.
"I don't really know if I have a future at Hull. But I do think actions speak louder than words and the way things look it seems my face doesn't fit.
"Reserve football every week is not good for a professional at the age I am - you need to be in the first team somewhere.
"Scunthorpe have given me that chance and I want to impress to say thanks to them.
"If I do well here then it's up to the club to decide if they want to keep me permanently. You never really know what is going to happen in football."