On Monday 2 October, Tees Valley Metropolitan Mayor Ben Houchen and his team see the climax to an expensive land dispute when they lock horns with PD Ports in the High Court.
It’s a tough time for Tees Valley local authorities who are having to deal with rising care and fuel costs. Redcar and Cleveland council faces a budget overspend of £7.7mn. Middlesbrough has a forecast £11.5mn budget shortfall. Stockton has a budget gap of over £2mn. Hartlepool faces a £5mn black hole in its finances. According to council Leader Stephen Harker, Darlington’s budget is £45mn less than it was in 2010.
But there is a corner of the Tees Valley- namely the offices of Tees Valley Combined Authority (TVCA) and its Mayor Ben Houchen – where it seems there’s no shortage of hard cash to splash on pointless projects.
One such is the row with neighbour PD Ports over access across TVCA land, the subject of Monday’s High Court hearing.
North East Bylines has in its possession dozens of emails, originating from responses under the Freedom of Information Act, that show TVCA, Houchen, and Redcar Council officers, plotting to undermine PD Ports’ High Court case, using taxpayers’ money.
A Boris Johnson peer, Lord Houchen is the man behind transforming the 2,600-acre contaminated former steelworks site at Redcar, into an industrial estate. It’s the largest brownfield regeneration in Europe. The site is now called Teesworks.
The company Teesworks Ltd was established as a joint venture between TVCA subsidiary South Tees Development Corporation (STDC) and companies ultimately owned by four local businessman: Chris Musgrave, Martin Corney, his stepfather Ian Waller, and Chris Harrison. The businessmen now own 90%of Teesworks Ltd, STDC just the remaining 10%. The company’s role is unclear, except to buy Teesworks land at a discount, collect the millions from scrap sales, and issue dividends to the shareholders.
The Teesworks land is nearly all held by South Tees Developmens Ltd, a wholly-owned subsidiary of STDC.
Cleaning up the polluted land is the responsibility of the public sector. Houchen himself has estimated that the final bill to the taxpayer will amount to £482mn.
Even before the steelworks land was bought in 2020 with a Compulsory Purchase Order (CPO), STDC had come to an informal deal with PD Ports over access to the latter’s operations across the old steelworks land. STDC would confirm PD Ports’ access rights across STDC land, in return for access to Teesworks via the Smith’s Dock Road roundabout which is built partly on PD Ports land.
However, no contract was signed, and STDC turned on its erstwhile regeneration ally after the CPO. The development corporation demanded a declaration from PD Ports that they acknowledged they had no legal right of access. This was despite the evidence of deeds a century old, many years of usage, and the fact that Teesworks traffic would need to cross the roundabout.
Behind the legalese semantics is the suspicion of a ransom strip. A handkerchief of land can be used to demand cash if it blocks access.
PD Ports does have other entry points, but the impact of the STDC move is serious. During the row PD Ports’ Canadian owner Brookfield Asset Management, after hoping to sell, withdrew PD Ports from the market. The move was suspected by some to be an outcome of the dispute. STDC had placed its own bid.
The magic roundabout
Rather late in the day STDC noticed that if they blocked access to PD Ports then the latter could very easily impose their own ransom strip by blocking use of the roundabout on Smith’s Dock Road, built with public money for over £1mn in 2019. In the middle of a post-industrial wasteland, the roundabout lies within the Borough of Redcar and Cleveland.
Although PD Ports denies any intention of a ransom, what we have is a potential Mexican Stand-Off – at least in the minds of the STDC. There have followed a series of frantic efforts to shift the roundabout away from its position which is partly on PD Ports land.
Emails in our possession show the attempts to move the roundabout with the help of Redcar council officers. That would prevent the feared ransom strip by PD Ports and strengthen the STDC case in court.
The emails seem to be among TVCA Chief Executive Julie Gillespie, Managing Director of Redcar and Cleveland Borough Council John Sampson, and other council officers.
We can’t see all the details of correspondents due to redactions of material obtained under the Freedom of Information Act. But the messages show the pressure placed on non-political council officers by Ben Houchen’s team.
The idea was to get Redcar to carry out the works to the roundabout and then invoice TVCA. But the operation was delayed by regulations which slowed progress.
The estimated cost of the works had spiralled from £100,000 to over £281,000 in the Bill of Quantities. The cost had only been approved for £100,000.
The new design failed regulations. “First design has 25 fails or marginals,” commented an email of 29 June this year.
The messages show that the works were intended to remove PD Ports’ control over the roundabout. Timing and secrecy were paramount
A 28 September 2022 email to Redcar from a Teesworks Project Engineer asked for a “quick call. with regards to potential alterations to Smiths Dock/Dockside Rd roundabout due to the ongoing land ownership dispute with PD Ports”
An option this email suggested was “to remove a section of footway and alter the kerbline to remove any carriageway/ footway within PD’s ownership triangle.”
In an email to Redcar council of 8 February this year, Lichfields, Teesworks’ planning agents, wrote:
“The proposed amendments to the roundabout will avoid the need to access the disputed area in future…
“..We look forward to continuing our discussion with the council on the timescale..”
Under Redcar’s planning radar
TVCA and Redcar tried to keep their plan for the adjusted roundabout hidden from PD Ports. To do this they had to ensure the works would slip under the planning radar.
An email from Redcar’s Andrew Carter to John Sampson on 24 November 2022 suggested a “minor amendment” to the planning application “so the likes of PD Ports wouldn’t be notified.”
On 2 December 2022 Redcar’s
Principal Planning Officer (name redacted) wrote to Lichfields:
“Should Teesworks not intend to use the Council as Highway Authority to carry out the work, I would advise that planning permission would be required for the works should it be going to be carried out by a third party.”
Julie Gillespie in her email to John Sampson of 6 March this year made the TVCA position clear:
“We are reluctant to submit a planning application at this st[age] because of the potential of PDP to object and make relationships worse.”
Why the rush?
On 26 June this year there was still pressure to get the work done as quickly as possible. An email with names redacted asked:
“Please can you advise when we will receive sign off from a technical perspective? As we are now committed to the 3rd July commencement date.”
On 29 June this year, an email from a redacted name to Redcar’s Steve Newton and Robert Hoof declared in bold type:
“During my discussion with Teesworks yesterday, they seem adamant that the works MUST commence on Monday 3rd July..
“..The complicating factor…Ben Houchen has ‘promised’ …that the works on the roundabout will be completed by the end of August.”
Which begs the question: who did Houchen promise? And why the rush? The original roundabout is perfectly functional and it’s in the middle of nowhere. Teesworks is still undeveloped.
Two emails reveal that around the beginning of March this year, Houchen intended to put a hold on payments owed to Redcar council until May – after the local elections and into the next financial year.
The email from John Sampson with no date to an unknown recipient read:
“Spoke with Julie Gillespie on Friday afternoon – she confirms that Ben H has put a hold on a range of funds coming to us – the TVCA contribution is one such sum. We talked about unlocking this logjam and Julie was going to have a conversation with Ben”
In an email to John Sampson of 6 March this year, Andrew Carter expressed concerns about the likely impact on ongoing projects of Houchen’s intention to withhold funding:
“If an in-principle decision was made by the TVCA to not sign anything else off by May 2023 then that would have a significant impact on a few projects.”
He presented a table that listed 21 projects that could be affected , with a total value of over £14.7 mn, but how much of it was owed by TVCA is unclear. The writer points out that a delay to one project would hike costs by over £100,000.
The emails do not mention that the stay on funds was blackmail to force immediate action on the roundabout.
Could the hold on money to Redcar have been a separate issue, such as a cashflow crisis at TVCA?
We contacted leading politicians across the rest of the Tees Valley: Middlesbrough, Stockton, Darlington and Hartlepool. None had experienced a withholding of funds. Darlington’s payments from TVCA were slightly delayed we are told, but that was put down to sloppy bureaucracy.
Then why the plan to withhold money to Redcar?
The Redcar Labour leaders who came into office after the May elections are adamant that there was no delay in payment.
Nor does it appear that the work on the roundabout was ever done. The works next to it are for a link road across Teesworks land.
The altered roundabout would do little to combat the PD Ports’ evidence of historical access rights to their operations and to the South Gare, a popular seaside location.
The taxpayer pays
We’ll know for certain the final costs of the skirmish at the end of the High Court hearing which will probably be on 27 October. An earlier hearing on 12 September decided that STDC should pay PD Ports £45,000 costs. An additional out of court settlement involved STDC paying PD Ports £19,000.
In the event that STDC loses its case, the taxpayer funds court costs, payments to lawyers and expert witnesses, and PD Ports’ costs as well.
Lichfields already have several contracts with TVCA, including one for general advice worth £1mn.
There’s also the bill of the new roundabout of £281,000, if they go ahead with it. So the whole affair might cost the taxpayer £4mn.
For comparison, one in three Teesside children are growing up in poverty. Another Metropolitan Mayor, Sadiq Khan, is funding free school meals for all children in Greater London.
Food for thought.