TVCA response to Tees Valley Review recommendations agreed

The Tees Valley Review, published in January, found no evidence of claimed corruption or illegality at Teesworks but criticised governance and transparency, and how public money was being spent, adding some decisions were not of a high enough standard when managing public money.

The combined authority’s cabinet, made up of Tees Valley Mayor Ben Houchen and the area's five Labour council leaders, agreed a series of responses on Friday (September 27) to recommendations laid out in the review.

Mr Houchen has now sent a letter to Angela Rayner, Deputy PM and Secretary of State for Housing, Communities and Local Government, explaining what has been done to make changes since.

Angela Rayner. (Image: SARAH CALDECOTT) Among them he will say that TVCA has attempted to renegotiate a deal with private developers who have a 90 per cent share in the Teesworks project, as per one of the recommendations. The deal, at one of Europe’s biggest brownfield regeneration sites, had previously been branded a poor one for taxpayers.

The review was triggered in May 2023 after calls for an independent inquiry amid claims of  “truly shocking, industrial-scale corruption” made by Middlesbrough MP Andy McDonald in the House of Commons.

The site is expected to create more than 20,000 jobs with a range of businesses including SeAH, Circular Fuels and Net Zero Teesside.

Documents published ahead of the meeting show Teesworks private developers Chris Musgrave and Martin Corney met with TVCA Chief Executive Julie Gilhespie to discuss renegotiating the deal.

But they suggest the pair have no legal obligation to enter renegotiations over their 90% ownership stake, the subject of much criticism, saying that deal was agreed by all parties.

They did however agree to change the terms of a deal which gives them the option to buy land owned by the public South Tees Development Corporation (STDC) which will now end in 2039, instead of 2050.

A letter from Ms Gilhespie to the businessmen said: “We accept your position that legally you don’t have to vary the joint venture contracts or make any amendments to them, however, thank you for confirming you are willing to consider making some variations given the circumstances.”

Darlington Council leader Stephen Harker told the meeting he sympathised with Ms Gilhespie having to attempt to renegotiate the deal, branding it an “impossible task” as Musgrave and Corney had no obligation to change their agreement.

“The combined authority ended up in [this] situation because somewhere along the line public perception became what it was,” Cllr Harker said.

“Going forward we do need to demonstrate that we are doing better.”

A working group made up of statutory officers from the five constituent authorities was established to develop a wide-ranging action plan. But Middlesbrough Mayor Chris Cook told the cabinet meeting he felt the process of responding to the recommendations was one he felt he had been “briefed on but never really involved in”.

But Mr Houchen said the Middlesbrough Mayor had been involved in working groups which fed directly back into how the responses to the recommendations were drawn up.

Mayor Cook also attempted to make a further change by removing the Lord Houchen’s veto on the TVCA cabinet.

“You’re trying to remove the Mayoral veto?”, the Tees Valley Mayor responded. “That’s not going to happen.”

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The Combined Authority will now be part of a peer review by the Local Government Association going forward to track the success of changes.

Mr Houchen said: “The response has been developed following one of the most wide-ranging and extensive processes ever undertaken by the Combined Authority and its constituent authorities.

“It has produced robust and highly detailed response to the Tees Valley Review and I would like to put on record my sincere thanks to all elected members, officers and external bodies who have contributed.”