Tees Valley Mayor Ben Houchen welcomed the verdict

Teesworks verdict: no illegality, but governance questions raised

The independent review into redevelopment of the brownfield regeneration zone has concluded. Although no evidence of corruption was found, recommendations on improving transparency were made.

Commissioned in summer 2023, the report concerned the Tees Valley Combined Authority’s oversight of South Tees Development Corporation and the Teesworks site, which has freeport status and is regarded as a flagship project for the Conservative leadership.

The report said: “We have found no evidence to support allegations of corruption or illegality. However, there are issues of governance and transparency that need to be addressed and a number of decisions taken by the bodies do not meet the standards expected when managing public funds.

“The Panel have therefore concluded that the systems of governance and finance in place within TVCA and STDC at present do not include the expected sufficiency of transparency and oversight across the system to evidence value for money.”

The independent panel was led by Lancashire County Council chief executive Angie Ridgwell.

Although Tees Valley Mayor Ben Houchen had himself initiated the inquiry, following allegations in the House by Middlesbrough MP Andy McDonald, the decision by Secretary of State Michael Gove to commission an independent inquiry, rather than appoint the National Audit Office to the job, was itself heavily criticised.

Ridgwell’s panel listed 28 recommendations to improve governance, which can be viewed in full at gov.uk.

As outlined in the final report, Teesworks is the overarching brand that represents the project to remediate and redevelop the former Redcar steelworks following the collapse of SSI in 2015.

The TVCA requested that the Secretary of State create the STDC for the purposes of managing and keeping safe the site and potentially promoting its redevelopment, a request granted in August 2017.

To date £560m, including £246m in government grants and £257m prudential borrowing has been lined up for the site up to the end of 2024/25, the panel’s report said.

So far, the report said, this has delivered:

  • 17% of the land under contract with a further 40% at Heads of Terms
  • 940 construction jobs plus a further 1,950 recently announced
  • 2,295 direct and 3,890 indirect jobs created once sites operational
  • 450 acres of land remediated or in remediation
  • £1.3bn business rate income potential over the next 40 years with a further £1.4bn at heads of terms
  • A new £450m quay at South Bank

Delivery has been supported by Teesworks Limited (TWL), a joint venture between STDC and two local businessmen: Chris Musgrave and Martin Corney, and this deal is one that has been called into question.

The headline numbers are impressive, but controversy has followed those leading the projects, with questions raised over the whether public land was sold at best value, amid wider questions over transparency and governance.

Although critics will point to the list of recommendations as justification for concern, the mayor will head into May’s election able to state that his methods have ultimately been backed, although he has acknowledged that “we can always do better”.

In a letter to Houchen accompanying the verdict, Gove said: “I know you will strongly welcome this conclusion. They also note that the pace and scope of the regeneration has had wide-reaching positive impact on the local economy, which we all welcome.

“The panel report identifies a ‘need to strengthen governance and increase transparency which can be done with limited impact on pace of delivery’ and makes recommendations as to how to address these by strengthening scrutiny and improving public accountability to the residents of Teesside. There are some specific areas for improvement and lessons to be learned, which I know you will also welcome.”

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