Tees Valley Mayor, Lord Ben Houchen’s, announcement that he is resigning from his roles as chair of South Tees, Middlesbrough and Hartlepool mayoral development corporations (MDCs) with effect from the next Tees Valley Combined Authority (TVCA) AGM on 27 June leaves important questions for the immediate future.
The news, reported by the BBC, comes eight days after North East Bylines reported that the government had issued TVCA with a Best Value Notice, six days after new government guidance that mayors should not be MDC chairs and two days after Tees Valley’s six Labour MPs wrote to Houchen demanding that he stand down.
Mounting pressure
These recent events were the culmination of almost two years of mounting pressure – to which the mayor has finally succumbed – focused on his role as chair of South Tees Development Corporation (STDC), incorporating the Teesworks regeneration site, said to be the largest in the UK, in which £560mn of public funds in grants and loans have been invested.
Under Houchen’s watch a 90% share in Teesworks passed to two local businessmen, Chris Musgrave and Martin Corney (The joint venture – JV-partners), without any private finance being invested, according to the Tees Valley Review (see below).
The controversy erupted in the public arena in May 2023 when Andy McDonald, Labour MP for Middlesbrough (now Middlesbrough and Thornaby East) made allegations of industrial-scale corruption involving STDC. Michael Gove, then Levelling Up Secretary, set up the Tees Valley Review to investigate.
The Review, which reported in January 2024, found no evidence of corruption, but it did find “issues of governance and transparency that need to be addressed” and that “a number of decisions taken by the bodies involved do not meet the standards expected when managing public funds.”
In September 2024 the TVCA audit and governance committee attempted to have Houchen replaced as STDC chair, without success.
First step
Andy McDonald told North East Bylines today:
“Lord Houchen’ indication that he plans to resign his chairmanship of the various MDCs at the next AGM should be welcomed. The government has made clear that mayors of combined authorities should not hold these positions as they represent a conflict of interest for the office holder, such as Lord Houchen.
“The TVCA has an awful lot to do to get its house in order regarding its governance and value for money arrangements following the damning findings of the Tees Valley Review and being placed in special measures with a Best Value Notice being issued.
“As its leader, Lord Houchen needs to take these matters seriously. Therefore, his acknowledgement of this issue following it being raised by Tees Valley Labour MPs is a welcome first step on the authority’s improvement journey.”
Houchen told the BBC: “I am incredibly proud of all we’ve achieved and will achieve… the boards will be updated at the AGM as per the constitution.”
What next?
Among important question remaining:
- Who will replace him? Though the mayor has the power to nominate MDC chairs, the affected MPs (all Labour) and local authorities (all Labour-led) in whose areas the three Tees Valley MDCs fall are likely to press hard for chairs politically acceptable to them.
- Will the new STDC chair attempt to renegotiate the agreement with the JV partners in Teesworks to secure a better deal for the public sector? If so, will they be any more successful than the STDC has been so far? One of the recommendations of the Tees Valley Review was that STDC should renegotiate a better settlement for taxpayers under the JV agreement”.
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