Renewed calls have been voiced for a National Audit Office investigation into the Teesworks project as one Labour peer suggested people in Teesside were being “fobbed off”.

A debate in the House of Lords on Wednesday centred around the independent review into the scheme and the actions being taken to meet its 28 recommendations.

Published in January, the report found no evidence of corruption or illegality at the brownfield site but highlighted failings concerning governance and transparency.

Labour peer, Baroness Sharon Taylor asked what assessment the Government had made of auditing arrangements for the Teesworks project.

After being informed the Tees Valley Mayor Lord Houchen was implementing the recommendations in the review relating to internal and external audit functions, Baroness Taylor said: “I honestly think the people of Teesside deserve better than to be fobbed off like this.

“We are told by ministers the NAO does not look at individual authorities so we questioned on the 30th of January and the 7th of March what are the arrangements for auditing this project so local people can be reassured what the return on their significant investment is giving them.”

Given the “scathing nature” of the recommendations, she said an NAO financial investigation “seems appropriate”, asking: “Why is the Government still resisting that?”

Baroness Kay Swinburne, Parliamentary Under Secretary of State in the Department for Levelling Up, Housing and Communities, said it is not the NAO’s role to audit or examine individual local authorities.

“Given that we have had a very thorough independent review which has been done then I think it’s time that we actually learn from those lessons and actually implement that rather than repeat it,” she added.

The review into Teesworks concluded the expected standards were not being met when it came to managing public funds. It also found systems of governance and finance did not provide sufficient transparency and oversight to evidence value for money to taxpayers.

The Teesworks project was originally set up as a joint venture between the South Tees Development Corporation and companies run by two local developers. It was transferred to 90 per cent private ownership in 2021.

The investigation found the private developers put no money into the scheme, but made money on the back of public sector investment of more than £560m. Lord Houchen previously said 9,000 jobs are being created with the Teesworks development with a potential of £2.7bn in business rates, and brings huge value to Teesside.

Baroness Swinburne said Lord Houchen has accepted all the recommendations in the report and was “enacting them right now”. As reported, Levelling Up and Communities Secretary Michael Gove has asked Lord Houchen to contact him in six months’ time to report on progress relating to the recommendations.

As reported, the review recommended that the South Tees Development Corporation (STDC) “renegotiate a better settlement” for taxpayers under the joint venture agreement.

A working group with representatives from the five Tees Valley local authorities has been formed to progress with the recommendations and Baroness Swinburne said they expect there will be “significant” progress made, “including the renegotiation of any of those contracts”.

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Regarding timescales, Baroness Natalie Bennett (Green Party) said: “Is it really right to leave a six-month hiatus?”, and suggested the Government monitors progress on “a much more regular basis… given the level of expressions of concern from the independent inquiry on what is happening there at Teesworks.”

Baroness Swinburne said it will be monitored “locally and centrally” over the six-month period. “I need to be very clear that the review did not find any wrongdoing,” she said. “There are some issue with governance that need to be fixed.”

She said time is being given to allow the combined authority to “get its house in order”, adding: “I’m sure, as I’ve been assured, that they are doing so right now.”