Teesside Airport to get extra £10m from public purse

TVCA said the cash would “enable the airport to stay on track for its recovery plan” after commercial revenues were hit by the covid-19 pandemic.

The proposed move was defended by Tees Valley Mayor Ben Houchen who said the airport had “achieved much more and much faster in its turnaround over the past year” than what could have been expected.

But it provided further ammunition for critics of Mr Houchen who believe the airport has become something of a cash cow.

TVCA spent more than £40m buying the loss-making airport in 2019 following a previous election pledge by Mr Houchen to take it back from previous owner Peel.

It has also provided a further £19.4m to support operational expenditure, along with £15m towards capital expenditure, which has helped pay for a multi-million pound terminal redevelopment, new passenger lounges, bars and other improvements.

Stockton North MP Alex Cunningham said: “This £10m extra is additional to the many tens of millions he [Mr Houchen] spent buying the airport and he’s still paying a private company to run it.   

“There may be some good things in his new financial plan, but this is another £10m he could have invested in developing and running a public transport service, which will ensure that people can get a bus or train to work and back home again.   

“He may have fulfilled a pledge to buy the airport, but I have no doubt the vast majority of the public who can’t afford to take a flight would rather he addressed the needs of everyone, not just those who can afford foreign holidays.

“The time for vanity projects is at an end – it’s time he started to deliver on the real needs of our people.” 

Asked if he was comfortable with the extra cash for the airport, Liberal Democrat councillor Chris Jones, a member of the overview and scrutiny committee at TVCA, said: “Not really no, it’s something I would like to look into and what, if anything, is going without to provide that funding.

“It’s a big chunk of money from the public purse.”

The Local Democracy Reporting Service (LDRS) contacted Stockton Council leader, Councillor Bob Cook, a member of the cabinet on the combined authority, which is expected to rubber stamp the updated investment plan later this week, but he said he did not want to comment.

The plan, which is worth £1.2bn over the next eight years and will finance business growth, transport, culture, and job creation, sees an extra £10m go towards the so-called Indigenous Growth Fund, which since 2019 has provided £50m for local councils to regenerate town centres and local communities.

An extra £5m will also be provided to boost business support for small and medium sized businesses across the region as part of a £300m plus warchest for business growth, which aims to deliver new jobs.

Referring to the criticism of his continued investment in Teesside Airport, Mr Houchen said:  “Over the past year, Teesside Airport has achieved much more, and much faster, than we could have ever expected in its turnaround plan. 

“It has secured a low-cost carrier and new domestic and international routes with some of the biggest airlines and holiday companies such as Loganair, Ryanair and TUI. 

“This has all allowed us to bring our terminal redevelopment forward, giving us an airport fit for the future, supporting local businesses in the process. 

“The aviation industry has been one of the hardest hit by the coronavirus pandemic. 

“UK airports are set to lose £2.6bn in revenue in summer 2021 alone according to the Airport Operator’s Association, a body representing airports across the country.

“We’re working hard to make sure our airport doesn’t bear the brunt of a global pandemic.

“Let’s not forget, if our airport hadn’t been brought back into public ownership  it would be closed by now, with 350 homes built on the airport terminal’s car park.”

Mr Houchen added: “By expanding the Indigenous Growth Fund local council leaders have the cash they need to push forward with ambitious regeneration plans that will create the skilled well-paid jobs we all want to see come to our region. 

“It also means they have the resources they need to support communities and our amazing local businesses bounce back from the pandemic.

“Small and medium sized businesses are the lifeblood of our economy – they account for more than 99% of all businesses and support tens of thousands of jobs. 

“Every week I meet fantastic business owners who are achieving amazing things right across Teesside, Darlington and Hartlepool. 

“This fresh funding for them will mean we can support more firms to grow and create more good-quality, well paid jobs for local workers.”

Teesside International Airport Limited is governed financially by the combined authority via another limited company, Goosepool, both being subsidiaries of TVCA, a structure which has been criticised by some for its apparent lack of transparency.

Airport operator Stobart Aviation, which operates Teesside Airport, has a 25% shareholding in Goosepool, and its directors include Kate Willard from Stobart and TVCA chief executive Julie Gilhespie.

The LDRS revealed last November that the airport made a £2.6m loss in the previous 12 months.

Financial support has been provided to the airport by TVCA after it was forced to close its doors for a period in 2020 when the coronavirus outbreak grounded planes, while a £471,000 grant was also awarded by the Government to cover the cost of the airport’s business rates.

TVCA’s investment plan is reviewed annually and cabinet papers state Mr Houchen requested a further refresh following his re-election last month  to “take cognisance of the impact of covid-19 and to consolidate funding received outside of the investment plan into the investment plan going forward”.

A £4.2m underspend from an education, employment and skills strategy is proposed to be re-allocated to support the region’s recovery from covid-19.

Meanwhile already-funded projects to extend the platform at Middlesbrough railway station and highways improvements to the A689 road at Wynyard have been removed from the investment plan with £4.68m also going towards covid recovery as a result.