North East Bylines recently reported on the “Deal of the Century”, a windfall for the Teesworks property developers and their proposed AI data centre at Redcar. But how is the public sector faring?
Freedom of Information
A 24 June 2026 response to a Freedom of Information (FOI) request to Redcar and Cleveland Borough Council (RCBC) has raised a thorny question yet again. When will the cash start flowing?
Getting down to brass tacks
A resident of the Redcar and Cleveland Borough asked RCBC for the “Total amount of business rates received to date by the Council from hereditaments located within the Teesworks site, the amount of business rates received specifically from: SeAH Wind Ltd (including any associated entities) Ørsted (including any associated entities). If no business rates have been received from either party, please confirm this explicitly”.
And what was the response?
RCBC confirmed that both sites “have not yet been formally brought into rating by the Valuation Office Agency (VOA), some are expected to be assessed during the current year. In advance of this, the government provides grant funding based on estimated values, with a year-end reconciliation to reflect the actual rateable values once confirmed. On this basis, the council’s share of grant funding for the current year is estimated to be approximately £10.5mn.”
Make this make sense
The VOA listing for the SeAH Factory’s postcode, as at 24 June 2026, is shown below. The factory doesn’t appear on the list, despite Teesworks’s claims that it started operations almost a year ago, on 30 July 2025.
When will the business rates be received?
A report from the Tees Valley Combined Authority (TVCA) finance chief Jo Moore, to the quarterly meeting of the South Tees Development Corporation (STDC) board on 30 March 2026, stated that “due to the nature of the operation of the national business rate system, there is a time lag of more than one year for business rates due to be captured on formal government returns and for the resulting cash flows to flow through to relevant recipient authorities. Therefore, whilst business rates income is accrued, it is some time before STDC receives the cash”.
We’re still waiting
Moore went on to say that “No monies have been received from RCBC to date. However these monies will start to flow to the billing authority and on to STDC starting in June 2026/27.” This means that the first cash should start coming through around now.
That’s not what the mayor said
This contradicts a statement made by Ben Houchen at a meeting of the TVCA Overview and Scrutiny Committee on 10 June 2026, when he told Councillor Lynn Pallister that “RCBC have received the cash in their bank accounts. As of two months ago. RCBC are now getting £10mn a year more than they were getting as of two months ago. That’s £10mn brand new on your bottom line. Those business rates ramp up to about £45mn a year in 2029. From that site for the next 20 years.”
That’s not correct either
However, the STDC’s Medium Term Financial Plan (MTFP) estimates £37mn in business rates income in 2029/30, not £45mn as suggested by the mayor. An excerpt from the MTFP can be seen below:
Forecasting is a tricky business
At the September 2025 meeting of the STDC board Jo Moore noted that the business rates income forecast was highly dependent on a confirmation from the VOA. This determination was expected in January 2026. Nine months after that statement, and five months after that January deadline, the VOA’s confirmation still hasn’t been made. At the January 2026 STDC Board meeting, Jo Moore confirmed that, in the absence of information from the VOA, business rates income forecasts for 2026/27 onwards would be based upon valuations from external advisors Knight Frank..
Mitigating the risk
The budget for 2026/27 is based upon “hereditaments that are already fitted out with power which triggers the business rates valuation. Business rates are back dated to this date. The financial risk is regarding the VOA confirmation of the rateable value, confirmation of the date from which business rates became payable and any delays in valuation. STDC is working closely with both RCBC as the billing authority and external advisors.” A provision of £0.9mn has been set up to mitigate the estimation risk.
So how much money are we getting?
The business rates income estimate for last year, 2025/26 is £9.9mn. For this year, 2025/26, it has been reduced slightly to £9.7mn. Both estimates will be subject to adjustment when the final calculations are notified by the VOA, but it is notable that Jo Moore is forecasting a reduction in income between these two years.
Designated Freeport tax zone
The second part of RCBC’s response to that FOI request notes that “the majority of business rates growth on the Teesworks site is expected to arise within the designated Freeport tax zones, where qualifying businesses benefit from business rates relief for a five-year period. During this time, the council receives grant funding from the Government in place of directly collecting those business rates.”
SeAH won’t pay business rates for five years
So assuming that the SeAH Factory became liable for business rates commencing in 2025/26, all payments up to 2030/31 will be met by the taxpayer via the Ministry for Housing, Communities and Local Government (MHCLG). If, as predicted by the STDC, the NZT project at the former Redcar steelworks comes on line in 2029/30, the business rates “windfall” will be paid by the MHCLG until 2034/31. A local windfall maybe, but we’ll just be circulating the same pot of public cash. And those predictions about NZT getting started in 2029? Teesworks and the STDC have never met a deadline yet.
