Councillors in Tees Valley are attempting to remove Mayor Lord Ben Houchen from his position as chair of South Tees Development Corporation (STDC) because of a possible conflict of interest.
The move came at a meeting of Tees Valley Combined Authority’s (TVCA’s) audit and governance committee (AGC) on 17 September in a recommendation that goes before the TVCA Cabinet this Friday. If approved, it will form part of TVCA’s response to the independent Tees Valley Review to be submitted to the government by the end of this month.
Houchen currently chairs both TVCA and STDC. The latter was set up by the former to lead the regeneration of the former Redcar steelworks site, now under the control of a public/private partnership, Teesworks Ltd (TWL), in which local businessmen Chris Musgrave and Martin Corney have a 90% shareholding and STDC 10%.
The interests of TVCA, which has channelled £560mn of taxpayers’ money into TWL via STDC in grants and loans, and those of STDC may be seen as in conflict, councillors believe.
The Tees Valley Review, set up by the former government following allegations of corruption – for which the Review found no evidence – reported in January and made 28 recommendations to deal with issues of governance and transparency that it said needed to be addressed and found a number of decisions taken by the bodies involved that did not meet the standards expected when managing public funds.
One of the recommendations was that the makeup of the STDC board, including the chair and role of associate members, should be reviewed to ensure relevant expertise and knowledge is in place to support the mayor in setting and delivering his strategic ambitions.
The AGC agreed, and at its meeting on 17 September decided that consideration be given to the appointment of a chair other than the Tees Valley Mayor to negate any perceived conflict of interest. If approved by the Cabinet on Friday it will go from there to the government as part of TVCA’s response to the Review
The AGC’s draft minutes record that members were told the appointment of a mayoral development corporation board was provided in legislation; members were recommended by the mayor and approved at the Cabinet. There had been some discussion around whether the chair should be the Teesside (sic) Mayor, the draft minutes record, and this might be a discussion point for committee.
Councillor Mandy Porter, of Darlington, the AGC chair, felt that it could be seen as a conflict in some respects, and asked committee what their thoughts were. Councillor Nicky Walker (Middlesbrough) agreed it was a matter of perception and felt it would be beneficial to have a different chair. Andrew Evans, independent member of the AGC, also agreed, and it was decided that this should form part of the recommendations to Cabinet.
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