'No evidence of corruption' at Teesworks - inquiry

Teesworks was formed in 2020 with the aim of creating jobs on the former steelworks site

A report into claims of cronyism and corruption surrounding finances at the Teesworks site has found no evidence of wrongdoing, but has criticised a lack of transparency.

The independent review found no evidence of corruption, wrongdoing or illegality, but made 28 recommendations.

It found a culture of excessive confidentiality and a lack of transparency.

Tees Valley mayor Ben Houchen has "welcomed" the report, while Middlesbrough MP Andy McDonald has branded it "damning".

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

The report was ordered in May 2023 and its findings were expected by the end of last summer.

The independent review, commissioned by Levelling Up Secretary Michael Gove, clears the agency behind the redevelopment of the area, the South Tees Development Corporation, its head, the Tees Valley mayor Ben Houchen, and private sector property developers, of corruption claims.

The report was triggered by press reporting and Middlesbrough MP Andy McDonald claiming in Parliament that the regeneration scheme harboured "corruption on an industrial scale".

Mr Houchen has been cleared of corruption allegations

Three local authority officers from outside of the north-east of England were appointed by government to investigate the claims.

After scrutinising 1,400 documents and interviewing 45 people, the panel says it has found no evidence of corruption, wrongdoing or illegality.

However, there is criticism of the South Tees Development Corporation in the report.

'Inappropriate decisions'

In one case the panel looked at how private property developers have ended up owning 90% of the site.

The report says they put no money into the scheme, but they have made money on the back of public sector investment of more than £560m.

The deal, it is said, should have been scrutinised more by the Tees Valley Combined Authority - all five of the Tees Valley local councils.

More broadly, the review found a culture of excessive confidentiality and a lack of transparency at the development corporation.

The final conclusion states that “inappropriate decisions and a lack of transparency which fail to guard against allegations of wrongdoing are occurring, and the principles of spending public money are not being observed”.

The review panel makes 28 recommendations, many of which propose more openness and more oversight by the Tees Valley Combined Authority.

'Lessons'

Levelling Up Secretary Michael Gove has asked Mr Houchen to report back to him in March on how he will respond to the inquiry's findings.

"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," Mr Gove said in a letter to the mayor.

"There are some specific areas for improvement and lessons to be learned, which I know you will also welcome."

Mr Houchen said he "welcomed" the panel's recommendations, which he said his team were already working on to improve "processes and procedures in line with the report’s findings".

“The people of Teesside, Darlington and Hartlepool can welcome this investigation, which sets out in black and white that there is no corruption or illegality at Teesworks," he said.

The Tees Valley Combined Authority Group CEO Julie Gilhespie added: “The conclusion of this review means we can now move forward in delivering vital investment and jobs for the people of Tees Valley.”

Teesworks said they were "pleased, but not surprised" that no evidence of corruption or illegality had been found.

It added: "We can now focus all of our attention on bringing the much-needed jobs and investment to the site for the benefit of the people of Teesside."

'Damning report'

But Independent MP Andy McDonald told BBC Look North: “When we get to the meat of it we discover there are major flaws that the panel have settled on in terms of governance, finance, accountability, process…

"This is a damning report and it’s done its very best to work within the parameters set by Michael Gove to give it the kindest twist it possibly can and yet this is what we hear."

Mr McDonald called the report "damning"

Labour shadow communities minister Justin Madders called for an investigation by the National Audit Office.

"The issue has always been one of value for money, and on that, the report shows that taxpayers' money was not being spent in the way the public should expect," Mr Madders said.

Teesworks timeline

• 2020: Teesworks was formed with the aim of creating jobs on the Redcar steelworks site. Shares in the company were initially split 50:50 between South Tees Development Corporation, a public body and a number of local developers

• 2021: The following year more shares were reportedly transferred to the developers, taking their total to 90%

• April 2023: Middlesbrough Labour MP Andy McDonald told the House of Commons that an investigation by the Private Eye magazine had “revealed truly shocking, industrial-scale corruption”

• May 2023: Levelling Up Secretary Michael Gove ordered an independent review into the issue, headed by the chief executive of Lancashire Council and two other local government officials. Labour said the review fell short of the wide-ranging National Audit Office investigation they had called for

• Summer 2023 - January 2024: Publication repeatedly delayed