So the government in the shape of Michael Gove, Secretary of State for Levelling Up, Housing and Communities (LUHC) has rejected calls for a National Audit Office (NAO) inquiry into the Teesworks site and Tees Valley Combined Authority (TVCA), the regional public body involved. This is despite requests from an army of politicians.
The controversy was sparked over the regeneration of the 2,600 acre former SSI steelworks site at Redcar, renamed Teesworks, and a joint venture between the TVCA’s South Tees Development Corporation and four local developers. The joint venture in the form of a company, confusingly named Teesworks Ltd, has gifted the businessmen 90% of its equity. The developers have so far earned more than an estimated £100mn in scrap sales and land deals, without investing a penny in cleaning up the site. The final remediation bill is expected to cost the taxpayer £482.6mn.
Promoting the Teesworks project as the success of the century is all the more important politically as the site will be at the centre of Teesside Freeport, the flagship Freeport project of Prime Minister Rishi Sunak.
The Labour politicians want to get to the bottom of dealings of Tory Tees Valley Mayor Ben Houchen with the four businessmen who jointly own Teesworks Ltd. They want a full audit inquiry to investigate the businessmen’s enrichment from the site, suspected cronyism, and the secrecy surrounding an operation funded from the public purse.
The Tories claim they want an inquiry to counter allegations of “industrial corruption” that they say are deterring private investors.
In his letter to Gove of 16 May, Mayor Houchen sought “an independent review” of the matter.
The NAO offered to conduct an inquiry, sending a “we’re ready when you are” letter to Gove. But any investigation would need the official go-ahead from the Secretary of State for Levelling Up, Housing and Communities. Gove, the said Secretary, was having none of it.
Gove’s letter to Houchen of 23 May said such an investigation was outside the scope of the NAO, and described his alternative.
The panel
What we have instead of an NAO inquiry is a limited investigation officially called an “independent assurance review”.
The Gove review has a panel of three high ranking local government officials, working around their day jobs.
The panel is comprised of Angie Ridgwell, Chief Executive of Lancashire County Council; Quentin Baker, a qualified solicitor and director of law and governance at Hertfordshire County Council; and Richard Paver, former Treasurer of the Greater Manchester Combined Authority.
The trio’s findings and recommendations are expected in the summer.
The panel’s Terms of References begin with what sounds like an inquiry’s conclusions:
“The department has seen no evidence of corruption, wrongdoing, or illegality, but recognises that the continued allegations pose a risk to the government’s and the combined authority’s shared ambitions to deliver jobs and economic growth in Teesside.”
The panel’s brief is to examine issues of governance, financial management and oversight. The Terms Of Reference include addressing the allegations of corruption and illegality at Teesworks. In addition the topics to cover include: land sales, the joint venture; procurement conflicts of interest; transparency of decisions.
National Audit Office
Would an NAO inquiry have been any different?
The NAO are the most experienced department to audit government bodies. They have access to highly trained and experienced auditors. They are now engaged in multiple Value For Money investigations across the public sector.
They are also independent of the government. The Comptroller and Auditor General is a parliamentary employee. Because the NAO are independent it’s more likely there’d be more public faith in any inquiry they conduct.
After all, Teeswork’s champions are the Tory mayor, now Lord, Houchen, and local Tory MP now Sir, Simon Clarke, both elevated in the Johnson resignation honours list.
Gove’s panel will have very little time for its review. Each panel member will be paid for just 20 working days. The three officials will have no powers to force access to documents, reports Private Eye (Issue 1600).
The political magazine comments: “given the timescale, the panel could well be left looking at what Houchen wants it to look at – which is just what Houchen fanboy Gove wants.”
Local Labour MP Andy McDonald complained the panel “falls way short” of what is needed.
The request for information
Perhaps an indicator of government transparency (or lack of it) is that Labour used the Opposition Day Debate on Teesworks on 7 June to ask for the release of correspondence about the Gove review.
Labour’s Lisa Nandy MP, the Shadow Levelling Up Secretary, said:
“Labour is therefore asking the overnment to provide all papers, advice and correspondence, including Ministers, senior officials and special advisers, relating to the decision by the Secretary of State and the Prime Minister to commission a review …including papers relating to the decision that the review should not be led by the National Audit Office.”
Her request was voted down.
Asking questions
To paraphrase Einstein, to find the right answers you need to ask the right questions.
It will be interesting to see how the three experts slalom round the questions that most rational souls would like answers to.
Mayor Houchen claims: “I welcome the government agreeing to my request for an independent review into the Teesworks project” and, “I look forward to the outcome” of the review.
Houchen is the Tories’ number one asset in the North East: he was returned in 2021 with 72.8% of the vote in the heart of Red Wall country.
Will Gove’s review be a whitewash? To quote Francis Urqhart, “You might very well think that, but I couldn’t possibly comment.”
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