Tees Valley mayor Lord Ben Houchen faces a call from MPs for a new inquiry into the finances of almost his entire Tees Valley Combined Authority (TVCA) empire following the publication today of a report by the cross-party Business Select Committee of the House of Commons.
“The Secretary of State for Levelling Up, Housing and Communities [Michael Gove] must direct the National Audit Office (NAO) to scrutinise the expenditure of public funds associated with Teesside Freeport, Tees Valley Combined Authority (TVCA) and South Tees Development Corporation (STDC),” says the committee.
Any NAO inquiry would come just three months after the independent Tees Valley Review into Teesworks, part of the STDC regeneration site at Redcar, found no evidence of corruption but did find that standards expected when managing public funds had not been met. The Review was carried out by senior council officials from other parts of England.
The committee says an NAO investigation is needed ”to recognise Teesside Freeport’s flagship status, to address the gravity and breadth of the concerns raised by the Tees Valley Review, to extend scrutiny beyond the limited remit of the Tees Valley Review and to assure the public that taxpayers’ money has been disbursed appropriately and legally.”
Mayoral election
The select committee’s call for an NAO investigation could not come at a worse time for Houchen, less than a week before Tees Valley voters go to the polls to decide whether to re-elect him for a third term as mayor.
The Teesworks site regeneration is being carried out by a joint venture (JV) – TWL – between STDC, which has a 10% stake, and local businessmen, who have a 90% stake.
The Select Committee says: “[I]t is the responsibility of the public authority, in this case TVCA, to ensure that appropriate checks and balances are in place such that any venture with the public sector reflects the Nolan principles [of standards in public life] of openness and transparency as well as value for money and public returns.”
It says all 28 recommendations of the Tees Valley Review should be carried out in full, but puts special emphasis on three of them:
- TVCA should ensure full understanding of the liabilities of both STDC and TVCA in relation to the activities of STDC and TWL and ensure appropriate management arrangements are in place to manage and mitigate the consequential financial risks to both organisations and the constituent authorities.
- STDC should explore opportunities to influence when and how land is drawn down and developed and if possible, renegotiate a better settlement for taxpayers under the JV agreement.
- STDC (Director of Finance and Resources) should work with the external auditor to support the completion of their value for money arrangements work for 2021/22, including any additional risk-based work that may arise in light of the [Review] Panel’s findings. The progress of this work should be reported to TVCA and STDC Audit Committees.
The MPs’ call for an investigation by the NAO was rebuffed today by the DLUHC. It said: “The Secretary of State already commissioned an independent report into STDC and Teesworks JV which found no evidence of corruption or illegality.
“It is not the NAO’s role to audit or examine individual local authorities. The Review was independent and expert, and Mayor Houchen has accepted all recommendations in the report.
“As this report recognises, freeports are key to levelling up and in just two years have generated nearly £3bn investment that will create thousands of jobs – with Teesside generating the most jobs and investment, as the Secretary of State highlighted in his response to the committee earlier this year.”
Mayor Houchen’s office has been approached for a response.
