Michael Gove orders probe into Teesworks 'corruption' claims

Conservative Tees Valley Mayor Ben Houchen said work at the site was being "smeared"

The government is setting up an independent panel to probe claims of "corruption, wrongdoing and illegality" at the UK's largest industrial zone.

Levelling Up Secretary Michael Gove said he had taken the "exceptional decision" to order the review into claims at the Teesworks site in Redcar.

Labour MPs had raised concerns over the transfer of millions of pounds of public assets to private developers.

Tees Valley Mayor Ben Houchen said he "looked forward" to its outcome.

In a letter to Conservative Mr Houchen, Mr Gove said he was acting on a request from the mayor and had "reflected carefully on the choices available".

He said the "continued allegation of corruption" had posed a "very real risk" to the site, which had "delivered jobs and economic growth".

However he said, although it was not in the National Audit Office's (NAO) remit to investigate the site, he would "welcome" the body to update "its review of the government's funding arrangements".

Michael Gove said an independent panel would be set up

Mr Gove said he would ask a independent panel to report on the governance arrangements, how decisions are made, and look "at the value achieved for the investment of public money on the site".

He said he would "invite" interested parties, including MPs, to make representations as part of "evidence".

Mr Houchen said the review was necessary to "show investors" that there had been no wrongdoing.

"My officers stand ready to provide any and all information requested by the independent review," he said.

About 20,000 employees will be working on the site, officials have said

Labour's shadow secretary for Levelling Up Lisa Nandy previously said there were "serious questions" that "remained unanswered" and had called for an investigation.

It followed reports publicly-owned land, potentially worth millions of pounds at the former steel works site were handed to private investors for £100.

Reacting to news of the investigation, Ms Nandy said: "This is bizarre. The Secretary of State's letter refers to an organisation that doesn't yet exist to hide the fact that there has been a complete breakdown in accountability on his watch.

"The NAO has the experience, capacity and independence to carry out an investigation, and Michael Gove has the power to order that investigation. Why, then, is he setting up a review where the terms and members will be chosen by him?

"The government must not hide from proper scrutiny, and there is no clear justification for not ordering a comprehensive, independent investigation from the NAO."

Middlesbrough Labour MP Andy McDonald had accused developers of financially benefitting from land which had seen millions of pounds of taxpayer investment.

Mr Houchen previously denied allegations of wrongdoing, saying the claims were "untrue" and that the work was being "smeared".

Earlier on Wednesday, Prime Minister Rishi Sunak caused confusion when he said Mr Gove had "already announced" an investigation into Teesworks, hours before his letter.

MPs including Labour's Washington and Sunderland West MP Sharon Hodgson had then written to Mr Sunak asking for clarification.

The Department for Levelling Up, Housing and Communities said it had not seen any evidence of wrongdoing and repeated Mr Gove's claims that the allegations "pose a very real risk".

The NAO said it would be "willing and able to carry out" an investigation if instructed to do so, but added that the government had made "alternative arrangements" by setting up the independent panel instead.