Another row has erupted over Middlesbrough’s new Mayoral Development Corporation (MDC)
The idea of MDCs is to use selected council assets to attract investment and fast-track regeneration. The transfer of planning powers is part of the move to cut red tape to speed up developments.
MDCs also have powers to buy, develop and sell land as well as build new infrastructure.
Earlier this year councillors rejected the idea of a Middlesbrough MDC, concerned at the loss of council assets, the diversion of business rates, and the relinquishing of democratic control to an unelected board. But the creation of the MDC went ahead regardless.
At the beginning of this month, planning powers were transferred to the MDC for the town centre and Middlehaven.
The borough’s new Interim CEO Clive Heaphy, has written to the Department for Levelling Up, Housing and Communities (DLUHC) to request a pause before putting the MDC into action.
Response from the Tories
The response of the local Tory politicians is one of outrage.
Simon Clarke MP for Middlesbrough South and East Cleveland. proclaimed the request for a delay as “a Trojan Horse to try to cancel this vital regeneration project entirely.”
Mayor Ben Houchen said: “I am disappointed to hear that Middlesbrough Council is trying to significantly delay the Middlesbrough Development Corporation project.
“A project that will deliver millions of pounds of investment and 4,000 direct local jobs to areas of Middlesbrough that have been neglected for far too long.”
A clear process is needed
The new Middlesbrough Mayor Chris Cooke replied that a clearer agreement is needed. Mayor Cooke said he was trying to achieve a “deal that works for everyone”.
He added, “I want any assets transferred to have a clear written process to ensure minimum service disruption for council and residents.”
Letter from the CEO
Heaphy’s letter was written in response to a consultation request from the DLUHC on the transfer of council assets worth £14.7mn to the MDC. In his letter he explains why there needs to be a delay in the preparation for the new body.
Heaphy advised that some assets like the bus station will need replacement facilities. And also that compensation will have to be agreed for some income- generating sites like car parks.
On specific assets he complained that the plan to take over the Civic Centre car park clashes with the existing intention to convert it into a playground for a temporary school.
Heaphy’s letter reveals the lack of preparation for the MDC, with the transfer of assets and planning powers done at breakneck speed without the customary due diligence.
His comments subtly refer to the troubles at the Town Hall under the last Mayor that culminated earlier this year in a Best Value Notice with the threat of a takeover by central government.
The letter said “we are keen to work in an integrated and collaborative way with the MDC and of course TVCA to benefit Middlesbrough.”
But, Heaphy wrote,
“We remain concerned about the readiness of the MDC to take on the extended powers confirmed to it by the Rt Hon Michael Gove, Secretary of State for Levelling Up Homes and Communities as the utilisation of those extended powers from 1 June could lead to greater confusion and uncertainty if all parties are not crystal clear on the details of operation.”
He argued that the town centre needed a single masterplan. All that he had seen so far was a map with a red line drawn around the MDC zone boundary. He wanted to see “a comprehensive and tested constitutional, legal and financial framework and operating protocols (asset transfers and planning).”
Without it he said “there is an increased risk of confusion and lack of clarity, significant risks will remain, and best value will be difficult to evidence.”
He has asked for a delay to 1 September of this year and said that Mayor Houchen was agreeable to a pause although of a shorter duration.
Clive Heaphy was hired in March for one year as interim CEO. He has 40 years experience in strategic roles in local and central government. Before this appointment he was a consultant at the Chartered Institute of Public Finance and Accountancy (CIPFA).
As Corporate Director for Finance and Resources at Nottingham City Council, he uncovered £15mn of illegal transfers between the local authority and Nottingham City Homes.
Mr Heaphy’s annual salary is £155,000, but as he was hired via CIPFA his costs are higher. Middlesbrough council has capped his total costs at £234,000.
Hartlepool watches closely
The row at Middlesbrough is being watched closely at Hartlepool Town Hall. The seaside town also recently opted for a Mayoral Development Corporation. But the Heaphy letter is giving councillors food for thought.
Although the Borough is run by a Tory-Independent coalition, Labour is the largest party with 18 councillors.
The Labour leader Brenda Harrison and Deputy leader Jonathan Brash (who is also the parliamentary candidate) have written to Hayley Martin, the Borough’s Chief Solicitor and Monitoring Officer. They want clarification on the concerns flagged up at Middlesbrough about the lack of due diligence in the MDC process. They wonder why the opinions of the Middlesbrough and Hartlepool leaderships could be so divergent.
In their letter, the Labour leaders question the transfer of assets to Hartlepool MDC that are in full use – like the Civic Centre. Should there be a delay to identify replacement properties, they ask.
They question whether Hartlepool MDC is ready to adopt its new planning powers. In addition, the councillors criticise the lack of a comprehensives vision with the MDC area spread over a patchwork of land.