Tees Valley Mayor seeks to protect Teesside Airport from ‘rogue’ politicians like himself, as the airport operator departs
Teesside Airport operator Esken Ltd, formerly Stobart Aviation, has jumped ship and pulled out of its contract with the airport company (TIAL). Now, in place of Esken Ltd, the airport is being operated directly by its own management team. Esken also owns 25% of the shares in the airport company, a stake that it is now about to hand back, at nominal charge, to the Tees Valley Authority. So, will the airport now be 100% publicly owned?
No. Tees Valley mayor, Ben Houchen, has other plans.
The 25% shareholding, instead of being held by the authority, will be handed over to a charitable trust – the Teesside Airport Foundation. Those who wish to see more transparency about the way the airport is funded and run will be disappointed.
How will the charitable trust be created?
Some observers have pointed out that Teesside Airport Foundation is not yet registered with the Charity Commission but is registered as a limited company at Companies’ House. A board of trustees has yet to be appointed, so the charity is still in the process of being set up, as has been stated in recent local press reports.
But the airport’s own website provides some food for thought while we’re waiting. It explains, in a post on 27 July, that mayor Houchen is setting up the foundation, and
“The Foundation will hold the 25% stake in the airport that will be transferred back to the airport, at no cost, from Esken, previously known as Stobart Group.”
It would, of course, be surprising if Esken were to put a price on its 25% shareholding, given that it didn’t pay anything for it in the first place. It was handed the shareholding, notionally worth £10 million (the airport was purchased from its previous owners for £40 million), in 2019 as an incentive to help in turning the airport’s fortunes around.
The article goes on, “It will consist of an independent board of trustees made up of local people who meet the qualifying criteria with applications for those interested in joining now open.”
Selection of trustees
If any readers are interested in applying to be a trustee, or ‘local champion’ as they are referred to later in the post, more information is available here.
If any reader applies, please get in touch. It will be very interesting to see who makes it through the selection process.
The Foundation’s website states that the selection will be made by unnamed ‘custodian trustees’. It is fair to assume that these may be the directors of the Teesside Airport Foundation company: three of the four directors of Goosepool 2019, which is the holding company for TIAL (David Soley, Alison Fellows and Kate Willard) plus Brian Robinson of Friends of Teesside Airport, and a solicitor, Charles Judge.
The benefits of directorship
Speaking of the directors of Goosepool 2019, a couple of interesting matters have recently come to light. When David Soley was appointed as non-executive chair of Teesside International Airport Ltd (TIAL), (as well as director of Goosepool 2019), much was made in the press of the fact that this position was unpaid, which seems very commendable and public spirited until we read the airport’s latest set of accounts. Here’s item 24:
So it turns out that the airport is a nice little earner for one of Soley’s companies, Cameron Bewery, as it was for one of Kate Willard’s. Kate Willard arrived at Goosepool 2019 as the representative of Stobart Aviation (Gazettelive). In the statement of accounts, no mention is made of her connection to Stobart’s. This may be because, by the end of 2019, she had none. Her profile on Linkedin shows that she left the company in December 2019.
Two things are of interest here. One is that one of her own companies profits from her directorship at Goosepool 2019, the other is that Stobart Aviation, despite owning 25% of the shares of the airport company, does not seek to replace her on the Goosepool board after her departure from the company.
Why might that be?
No surprise to Houchen
In January 2021, the Times, included, in a list of Stobart’s remaining assets “a contract to run Teesside airport, and associated ground handling operations”, which is not quite the joint venture partnership with 25% shareholding of we are used to hearing. Much earlier, in June 2020, the Investors Chronicle, had outlined Stobart Aviation’s plans “to exit non-core businesses over the next three years and focus more on developing London Southend Airport”. So, at least we know that Stobart’s departure from Teesside Airport should not have come as a surprise to Houchen and his associates.
Also, some doubts have been raised previously about the commitment of Stobart Aviation to Teesside Airport, their apparent indifference being noted in an article in November 2020 in Tees Valley Monitor.
Given that Esken/Stobart Aviation’s was not announced to the press until 27 July this year, some cynics might suggest that the long delay in completing the exit might have to do with the timing of the mayoral election in May, when nothing of this impending disruption to service at the airport was mentioned.
Access to data
In addition to the exclusion of the public, there has been a long-running battle between Houchen and the TVCA Scrutiny Committee over access to data about the airport operation. At a TVCA cabinet meeting on 29 January 2021, the Scrutiny Committee made the following comment,
““The sub-committee felt that they have not been given the opportunity to look at TIAL in as much detail as they would have liked to and have therefore not been able to fully scrutinise the budget allocations in this area. Officers advised that the responsibility for TVCA in relation to TIAL is in respect of the allocations within the TVCA Investment Plan and budget. The responsibility of TVCA does not extend to detailed budget review of a separate company.”
When I attempted earlier this year (in a Freedom of Information [FOI] request) to ascertain what TVCA governance arrangements prevented the Authority from providing the Scrutiny Committee with this information, their reply was that this was a request for comment, and so I was refused an answer.
Why has Houchen decided not to allow the public 100% ownership of the airport?
Now that Stobart’s has unilaterally pulled out of the arrangement, Houchen has the opportunity to set matters to right and give the public 100% ownership, and thus control, of TIAL. He has chosen not to do so.
The Information Commissioners’ Office may provide some insight into the reasoning behind this. Charitable Trusts are overseen by the Charity Commission. The Charity Commission may challenge the public’s right to access to information from a particular trust, making it difficult to obtain information. Not as watertight as public-private joint venture, but certainly a means to preserve opacity vis-à-vis the public.
One feature of this opacity is to do with the airport statement of accounts. The accountants presumably included the statement above because they have a statutory duty to do so, given that the beneficiaries of contracts are company directors. The question arises as to whether future trustees of Teesside Airport Foundation would also have to be named in the annual statement of accounts were they to dip their fingers in the honeypot in the same way that David Soley and Kate Willard have done. Time will tell.
Houchen protects ‘the people’s airport’ against rogue politicians
At the same time as he announced the creation of the Airport Foundation, Houchen also announced plans to ensure that the airport cannot be put up for sale and so removed from public ownership without a referendum. This seems a very bold gesture in favour of participatory democracy from a man who shies away from public scrutiny. In addition, given the popularity of the airport locally, it seems a little unnecessary.
But there may be an alternative explanation of his actions. One detail of Stobart’s departure has not yet appeared in the regional press. It is contained in this report in Business Live (27 July)
“The company also confirmed that if there were to be a future sale of the airport before January 25, 2023, Esken has agreed with Tees Valley Combined Authority that the business would be entitled to share in the proceeds of that sale up to an amount not exceeding £31.3m.”
Now that could provide some uncomfortable headlines, bearing in mind that Stobart put no money up front for the airport. So, the need for a referendum before any sale may be a pre-emptive strike:
““When I pledged to bring our airport back into public ownership and save it from closure, I said I would secure it for the future. That means making sure the great progress we’re making can’t be undone by rogue politicians …
“… to make it free from political bias, we have put in place rules so politicians like me aren’t allowed near it!”
Er… right. So, “use it or lose it” is off the cards now?
Ben Houchen and the directors of Goosepool 2019 have been contacted for comment.