The government has not requested the National Audit Office carry out a full investigation into Teesworks yet.

The NAO previously said a probe was outside of its remit as it cannot examine the decisions or actions of the Tees Valley Combined Authority (TVCA) or the South Tees Development Corporation (STDC). However, it has now stated that it would be possible but it needs to be requested by a government minister.

Pressure has been piling on the government to launch an investigation after Labour’s Shadow Levelling Up Secretary Lisa Nandy called for a review and Conservative Tees Valley Mayor Ben Houchen echoed her request later the same day.

Read more: Car arsonist jailed for 7.5 years for one night fire-raising spree

An NAO spokesperson said: “The NAO does not have a statutory power to conduct examinations of individual local authorities and associated bodies.

“The NAO can agree to carry out such work following a request by a Minister. This would require agreement between the Minister and the relevant bodies to be examined, under Section 6(3)(d) of the National Audit Act 1983. No such request has been received by the NAO.”

Concerns were raised about Teesworks after a share transfer saw companies owned by Mr Corney and Mr Musgrave – JC Musgrave Capital, Northern Land Management Ltd, and DCS Industrial Limited – increase their Teesworks Ltd shares from 50% to 90%, leaving the STDC with 10%, rather than the 50% it had held before.

At the time, Stockton North MP Alex Cunningham said the area was seeing “dodgy deals” but Mr Houchen said the deal removed the liabilities for the site from the taxpayer and allowed the freeport to secure hundreds of millions of pounds of private cash.

A valuation seen by the Local Democracy Reporting Service puts the cost of remediating the site, excluding the 90-acre SeAH plot, at £482.6m and a nominal value of £1 was placed on the entire site.

Originally, the aim was to develop 20,000 jobs over 25 years at Teesworks, with public money used to remediate some parts of the site and then cash from investors would be reinvested to remediate the next plot.

To get more stories direct to your email basket go here 

However, Mr Houchen has previously said the remediation work needed to be speeded up so investors could take advantage of time-limited freeport tax breaks, which will be reviewed in 2026. This is the argument behind moving to a 90/10 shares split, so private investment could be brought in quicker.

Currently, Teesworks Ltd is entitled to buy land at the site for £1 an acre. The STDC borrows money to remediate plots and then Teesworks Ltd pays it back with interest. If it does not pay back the STDC, it will not be able to acquire the land.

Teesworks Ltd is also eligible for half of the income of the scrap from the site. The most recent figure suggests the scrap amount has totalled £93m.

Mr Corney and Mr Musgrave did not take part in a public tender process to acquire shares in Teesworks in the first place (or when the shares were increased to 90%), however, Mr Houchen has said without the developers the scheme would not have happened.

Read next:

Get more from The Northern Echo with a Premium Plus digital subscription from as little as only £1.50 a week. Click here

After Redcar Steelworks went into liquidation, the STDC tried to buy the site. However, it had to negotiate with Sahaviriya Steel Industries (SSI) and three Thai banks, as the banks were owed around £800m because they held the former steelworks site.

When it became clear that negotiations, which included delegations flying back and forth between the UK and Thailand, were not going to result in a deal the STDC applied for a compulsory purchase order (CPO) to take over the site. However, Mr Houchen said it was clear they were going to lose which is when Mr Musgrave and Mr Corney swept in at the eleventh hour to offer a deal, according to the mayor.

This came after their company DCS Industrial Limited signed a three-year lease for a 70-acre site on the Redcar Bulk Terminal (RBT). The SSI agreed to stop trying to block the CPO, in return for the RBT site. For brokering this deal, Mr Corney and Mr Musgrave were brought in as development partners on the Teesworks scheme.