Ashok Kumar, MP for Middlesbrough South and Cleveland East, has been a fierce critic of the Teesside Development Corporation for years. Here he looks at the peculiar way the TDC operated, which has led to the loss of millions of pounds of taxpayers' money

ONE of the most iconic photos of 1980s Britain was Margaret Thatcher's 'walk in the wilderness' in Teesside - a distance shot of the Iron Lady, handbag tightly gripped, walking slowly across a desert of industrial wasteland with the shadows of derelict workshops looming large behind her.

Other shots taken that day in 1987 show her in the constant company of a short, flaxen-haired and ruddy-faced man in an expensive Crombie overcoat.

In February 2002, that same man was grilled by the House of Commons Public Accounts Committee about accusations of arrogance, deceit and manipulation of public monies

That man was Duncan Hall, the former Chief Executive of the Teesside Development Corporation (TDC), the developers of the 'wilderness' - the former Thornaby works of Head Wrightson.

Mr Hall had many admirers in his day. He typified the new breed wielding the Thatcherite broom, sweeping away the slow, bureaucratic practices of urban regeneration, replacing them with business pizzazz and acumen.

The TDC was one of the 11 urban development corporations set up by the Conservatives in 1987. It was arguably the most controversial and the most political of them all. It was said to be "Mrs Thatcher's favourite", and Mr Hall boasted that he could get the Cabinet Room at Downing Street on the phone at the drop of a hat.

Now today the same man, and the same corporation, stands accused of recklessly venturing public funds and losing up to £34m from the public purse - a sum that the Public Accounts Committee believes could reach £40m or more

A National Audit Office (NAO) inquiry found the TDC played fast and loose with its cash, and has left behind it significant and as yet uncosted liabilities that the taxpayer, in some way, will have to bear.

To understand this sorry state of affairs, we have to examine how the TDC worked. It may have been a public body, but it did not behave like one. Mr Hall's background was in property dealing, and it showed.

The board, a group of nominated businessmen, quangocrats and acquiescent local council leaders, allowed the day-to-day management of the TDC to be delegated to Mr Hall, and for that work to be monitored by the TDC's chairman, Sir Ron Norman, a Durham-based housebuilder.

Board meetings were perfunctory, often with only one executive officer present - the ubiquitous Mr Hall. He generally covered the whole spectrum of activity, from financial reporting to planning advice.

Mr Hall's mtier was publicity - publicity which was lavish and well-funded, if not always well-founded. There were press launches in marquees, and four course lunches to boast of potential developments - many of which came to naught. A racing yacht, and its associated crew, was bought so that the viewers of the Whitbread Round the World Trophy could never fail to be aware of the corporation's existence.

The TDC lived well, ensconced in one of its own office developments, with uniformed flunkies at the door and an indoor foyer graced by a tinkling fountain. At TDC-sponsored meetings, a hired butler, complete with wing collar and pinstriped suit, served tea and biscuits.

The TDC's property-led approach manifested itself in its choice of projects. The emphasis was on 'easy wins' to please Downing Street.

At the time, the Teesside economy was suffering massive cuts in the steel, engineering and chemical industries - but the 1980s' commercial atmosphere forced the TDC to concentrate on retail and leisure developments. Whether these were sustainable, or led to any real improvement in the competitiveness of the Teesside economy, is debatable.

Indeed, the Teesside Retail Park on the former Stockton racecourse so damaged the nearby High Street that later in the 1990s more public money had to be used to recreate the Wellington Square shopping quarter and to revitalise the town centre.

Other developments, such as the multiplex cinemas and nightclubs at Teesside Park, or supermarkets on reclaimed Hartlepool dockland, may have happened anyway without need of massive public subsidy.

Some developments were universally welcomed - the new Stockton Campus for Durham University and the Tees Barrage - but, nearly half a decade on from the TDC's demise, there are still huge areas of derelict industrial land downriver from the Transporter Bridge.

Indeed, the TDC probably achieved less in terms of outright job creation and land reclamation than other urban development companies.

The allegations of dubious practices began in the later years of the TDC's life. Critics, however, were silenced by the relentless barrage of good news from the TDC's press consultants, and by the desire of local councils to jump aboard the gravy train before it ground to a halt.

The local press, though, became interested, and in particular The Northern Echo. I secured adjournment debates and tabled a large number of questions - but these efforts ended up enveloped in a civil service cotton wool of warm words from ministerial briefings and prepared Parliamentary answers.

However, towards the very end of the TDC's life, the allegations became more sustained. Whistle-blowing from within Dunedin House - the TDC's riverside HQ - and from local businessmen became so loud that I arranged for some of the whistlers to meet the then Regions Minister Alan Meale.

He set up a special internal investigation which found evidence to raise real suspicions. It discovered that prior to the wind-up of the TDC there had been shredding of documents on a heroic scale. Documentation relating to key land transactions was missing, and there was evidence of the sale of land, by the chief executive, at far less than market value.

However, this was an internal departmental investigation: it faced difficulties in interviewing key civil servants responsible for overseeing the TDC.

I understand that there had been an unwillingness on the part of senior civil servants throughout the life of the TDC to intervene decisively. In July 1996, a threat by Sir Ron Norman to resign led to an investigation being shelved. This unwillingness cost the taxpayer dearly.

Myself and other Teesside MPs got the NAO involved. At last, a team of expert auditors and specialists was able to sift and test the evidence.

In February, when the Public Accounts Committee discussed its report, it was the first time the principle players had had to account for their actions in front of representatives of the taxpayer.

Mr Hall, in particular, received a roasting. His responses ranged between the belligerent, the bellicose and the blustering, but he was unable to escape the inevitable conclusion that he had run a one man empire that played fast and loose with public money.

Today, the Public Accounts Committee makes its final recommendations. It has not stinted in its criticisms of the TDC, and has used strong language in describing the abuses of power that occurred at Dunedin House, and of how the Teesside public were deliberately kept unaware of what was going on in their name.

It makes a number of tough recommendations which will apply to all existing and future quangoes. These are strong and urgently-needed, although I am still concerned that there will be no legal powers to surcharge or fine board members of bodies like the TDC. The humblest local councillor is liable to surcharge if his or her council misbehaves, yet the people responsible for millions of pounds a year are not similarly liable. I will bring this to John Prescott's attention.

Sadly, quangoes are still prominent in the public landscape, and many of them, such as the regional development agencies, now deploy spending power which dwarves that of the urban development corporations.

In many parts of the UK - including Teesside - a new generation of urban regeneration companies is springing up and, following the NAO report, the way they are run will have to be radically overhauled.

The TDC was a child of its times, and those times, thankfully, are gone. However, I believe that the germ that infected it is not dead. It is merely dormant. It could spread to another public body at any time, and the antidote to that infection has to be kept on the shelf at all times, ready for use when needed. The Public Accounts Committee has devised the formula for that antidote.