Mayor to move 'with pace' after Teesworks inquiry

Mr Houchen was asked by Michael Gove to set out his response to the report by 8 March

The Tees Valley Mayor Ben Houchen has set out a plan to address the problems a government-commissioned expert report found in the way the huge Teesworks regeneration project is being run.

Lord Houchen has written to Levelling Up Secretary Michael Gove with his response to a review of the redevelopment of the former Redcar steelworks site by a trio of local government experts.

The panel, which was led by Lancashire County Council Chief Executive Angie Ridgewell, found no evidence of corruption, and said 9,000 jobs had either been created or were in the pipeline.

But they also made 28 recommendations after finding significant problems with governance and accountability on a site that has had more than £500m of taxpayer investment.

Although nothing unlawful was found, the report said the lack of transparency the panel found could “fail to guard against allegations of wrongdoing”.

Michael Gove asked the Conservative Mayor to set out his response to the report by 8 March.

In a letter to the Secretary of State sent this week, Lord Houchen says the plan has been endorsed by the five local council leaders who sit alongside him on the Tees Valley Combined Authority.

He says a working group from the five Tees Valley local authorities has been formed to work through the recommendations, and he sets out how each of them will be tackled.

His letter does not set out any timetable at this stage for the completion of the action plan, but says he plans to move “with pace” alongside the Combined Authority Cabinet which includes himself, and the other council leaders.

Deal renegotiation

The recommendations centre on the Combined Authority, but also cover the running of the South Tees Development Corporation Ben Houchen formed to oversee the site, and the involvement of the government.

Work to redevelop what is now known as Teesworks began after the Thai company SSI closed Redcar’s steelworks in 2015 with the loss of 3,000 jobs.

It is now one of the biggest brownfield regeneration sites in Europe.

It is being run as a joint venture between the publicly-owned and funded South Tees Development Corporation led by the Mayor, and two Teesside businessmen, Martin Corney and Chris Musgrave.

The two entrepreneurs initially owned 50% of the shares of Teesworks, but that was raised to 90% in 2021, with the remaining 10% staying in public hands.

One of the panel’s recommendations said, if possible, the deal with the two businessmen should be renegotiated, to get “a better settlement” for taxpayers who have invested £560m in the clean-up and redevelopment of the site.

Teesworks is a former steelworks site in Redcar, which is being converted for green industry

The experts’ report found Corney and Musgrave’s involvement had helped make regeneration happen quicker than would otherwise be possible.

But they also said that, to date, the businessmen had not put “any direct cash” into the site, while they had received £45m in dividends and payments, and were holding a further £63m from the sale of a strip of land which will be occupied by wind turbine monopile manufacturer SeAH Wind.

Although Lord Houchen has said he accepts all the recommendations of the report, when asked on BBC1’s Politics North whether he would look again at that deal, the mayor said he would not renegotiate an arrangement which was proving successful and creating thousands of jobs.

But in response to Michael Gove, he says the Tees Valley Combined Authority Chief Executive Julie Gilhespie will be writing to Teesworks “in due course” to negotiate how changes might be achieved.

It might not prove that fruitful, though, if the expert report is correct. It said Martin Corney and Chris Musgrave saw “no prospect of renegotiating.”

Reinstated meeting

There will now be a chance, though, for council leaders and the mayor to discuss the report and the action plan at a meeting of the Tees Valley Cabinet on 15 March.

That meeting was initially cancelled without the knowledge of the council leaders, because it was said “no substantive agenda items” required a decision. Lord Houchen said the meeting was “not important” as the action plan was at such an early stage.

It has seemingly now been reinstated at the request of the Labour leaders of Darlington, Middlesbrough, Redcar & Cleveland and Stockton Councils, who will now get to discuss the report and the action taken to date.

And there will be a renewed focus on the role the council leaders and local authorities play as the expert panel found significant shortcomings in their scrutiny of the arrangements at Teesworks by councillors.

Mayoral election

Campaigning has begun ahead of the next election for Tees Valley Mayor on 2 May, and the fall-out from the Teesworks report is likely to be raised by all candidates.

Ben Houchen is hoping for a third term, and says the report vindicates his approach by rejecting the allegations of corruption made in parliament by Middlesbrough MP Andy McDonald, and acknowledging that thousands of jobs are being created.

But Labour’s candidate Chris McEwan wants to see a further investigation by the National Audit Office, and has promised to “open up the books”.

The Liberal Democrat contender Simon Thorley says he would look to renegotiate the deal with the businessmen as it is “bad value for money”, but has also criticised Labour for failing to hold the Mayor to account.

The Green Party’s Sally Bunce, who also plans to stand, has also talked about the need for more openness and accountability at Teesworks.

How much of this has cut through to the voting public is hard to know, but the way such a crucial site for Teesside’s economic future is being regenerated looks likely to be an issue both before and after this May’s election.