POINT 1.8 of the executive summary of the Teesworks report is explicit about one thing.
“Based on the information shared with the Panel, we have found no evidence to support allegations of corruption or illegality,” it says.
So the lurid claims, issued amid the protection of Parliamentary privilege, about “industrial-scale corruption” were unfounded.
But the report is not so clear-cut about many of the other matters under its consideration.
Point 1.8 continues: “There are issues of governance and transparency that need to be addressed and a number of decisions taken by the bodies involved do not meet the standards expected when managing public funds. The Panel have therefore concluded that the systems of governance and finance in place within TVCA and STDC at present do not include the expected sufficiency of transparency and oversight across the system to evidence value for money.”
Indeed, anyone who then spends good time to wading through 75 pages of dense detail and instantly forgettable abbreviations – TVCA stands for the Tees Valley Combined Authority and STDC for the South Tees Development Company – will feel a little aggrieved to find that it all comes to an abrupt end with a single sentence at the end of Conclusion 7.
“Based on the evidence from the review, the governance and financial management arrangements are not of themselves sufficiently robust or transparent to evidence value for money,” it says.
Yet that’s probably the question most members of the public want answered. It’s what is at the heart of the nine questions The Northern Echo posed at the start of the inquiry: amid all the excited political hullabaloo, are the public getting value for their taxpayers’ money?
And as there is no definitive answer to that point, the arguments will continue to rage, especially as forensic analysis of the 75 pages provides more talking points, especially as the elections near in this crucial "red wall" battleground.
The report constantly refers to the “incredibly complex” deals it has been asked to address, and Paragraph 5.3 notes how “the business case for the site is complex and fluid, evolving at pace”.
But the report does provide foundation for one of Labour’s strongest allegations: that two private businessmen (referred to as Joint Venture Partners, or JV) have acquired 90 per cent of a site that the taxpayer is putting £560m into clearing up and turning around while they have not put any of their own money at risk and yet are already reaping rewards.
Paragraph 10.13 says: “At this juncture, the JV partners have put no direct cash into the project and have received nearly £45m in dividends and payments, and hold £63m of cash.”
But they are actively involved in the project. Paragraph 10.13 continues: “They have contributed their intellectual capacity and human resource from their own companies at no cost to the JV and there is little doubt they have bought pace to delivery that would not have been achievable by STDC alone.”
This is the crux. Ben Houchen was elected as the Conservative mayor of the Tees Valley to get things done. The Government allowed him to create a development corporation so he could get things done without the turgid processes of local government holding him back. It gave him half the money to get things done and allowed him to borrow the rest. It encouraged him to use the private sector to get things done.
And he has got things done: Europe’s largest brownfield site has been remediated in just three years so that it is creating jobs and has positioned the Tees Valley are the front of the green industrial revolution.
But has it been done properly?
Paragraph 12.7 says: “ The project is described as the largest regeneration project undertaken in the UK covering thousands of acres of land. The project is complex and the JV between the public and private sectors brings the inevitable cultural tensions between the desire to move at pace unencumbered by bureaucracy as opposed to the expectations of accountability and transparency due to the fact that it is the recipient of considerable amounts of public funding.”
Paragraph 13.65 talks of “a persisting theme or culture of excessive confidentiality/lack of transparency”. It says briefing reports were compiled with a “paucity of detail” and those trying to advise and scrutinise were left with an “information vacuum”.
This comes to a head in Paragraph 16.22 when a decision was made to enter into a deal with the “JV Partners”, Martin Corney and Christopher Musgrave. The paragraph says: “The Mayor and senior officers argue that it was a commercially advantageous and astute arrangement which ultimately benefited the public but, in terms of openness, transparency and informed decision-making the process fell short of what would reasonably be expected in the context of local authority decision making and significant public expenditure. The lack of transparency and scrutiny of this nature may have a corrosive effect on public trust which lead to less robust decision making.”
And that’s why we are where we are.
There were suggestions that the report might be a whitewash, but Conclusion 5 says: “The lack of transparency in the decision making and the very permissive scheme of delegation undermines the confidence Government can place on the evidence base and systems to secure value for money.”
And Conclusion 6 says: “Inappropriate decisions and a lack of transparency which fail to guard against allegations of wrongdoing are occurring, and the principles of spending public money are not being consistently observed.”
Recommended reading:
- 'No evidence of corruption': But transparency issues as Teesworks report out
- MP should resign after Teesworks corruption claims, Tory ex-minister says
- Report reveals multi-million pound deals that have underpinned Teesworks growth
This is not “industrial-scale corruption” but it may be that only explosive hyperbole could have forced an investigation.
To enable Teesworks to go forward with a clean reputation, the report produces 28 recommendations, which will mean introducing more processes to improve decision-making and transparency.
This could conceivably lead the combined authority to becoming like any other local authority and struggling to speedily get things done, but it will mean there would be inviolable proof that the public is getting value for money.
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