Tees Valley’s Mayor, Lord Ben Houchen, and chief executive Julie Gilhespie have examined the governance of their troubled Combined Authority (TVCA} and its subsidiaries – including South Tees Development Corporation (STDC) – and found all to be well.
After a year in which the independent Tees Valley Review, set up by former Levelling Up Secretary Michael Gove, found “issues of governance and transparency that need to be addressed”, Houchen and Gilhespie report that:
“[T]he Combined Authority operates a satisfactory governance framework which supports the achievement of its policies, aims and objectives and meets all statutory requirements and ensures public money is used effectively and appropriately and is properly accounted for.”
Action Plan
In September 2024 the TVCA cabinet set out an action plan to implement the Tees Valley Review’s 28 recommendations, as analysed by North East Bylines at the time. The Chartered Institute of Public Finance and Accountancy (CIPFA) had already been commissioned to carry out a review of the Tees Valley internal audit function. Its 22 recommendations have all been accepted by STDC management, say Houchen and Gilhespie. Progress towards their implementation is to be reported to and monitored by the Audit & Governance Committee (AGC).
In addition, the Local Government Association (LGA) had agreed to carry out a review of the implementation of the Tees Valley Review recommendations and would report to the STDC Board “in due course.”
Now, as their Annual Governance Statement to be reported to the TVCA cabinet on 31 January makes clear, the mayor and chief executive believe that their September action plan to implement the Review’s 28 recommendations, supported by the actions agreed with the LGA and CIPFA, are sufficient to deal with all the issues raised in January by Gove’s Review.
Glaring omission
Whether or not members of the TVCA cabinet agree with Houchen and Gilhespie’s complacent assessment will be seen next Friday, when the Governance Statement is on the cabinet agenda.
Angela Rayner, Deputy Prime Minister and Local Government Secretary, may also have something to say on the subject. Her responses to the TVCA action plan and a recommendation by the House of Commons Business and Trade Committee in June that the National Audit Office (NAO) be directed to carry out an inquiry into Tees Valley are still awaited.
One glaring omission in Houchen and Gilhespie’s Governance Statement is any reference to Houchen’s own position as chair of both the TVCA cabinet and the STDC board.
The independent Review (Recommendation 16) said that the Secretary of State, TVCA and/or STDC should “review the makeup of the [STDC] board including the chair [Houchen] and role of associate members to ensure relevant expertise and knowledge is in place to support the mayor in setting out and delivering his ambitions under the current phase of delivery.”
The AGC did indeed review the makeup of the board at its meeting in September as reported by North East Bylines at the time, and decided that “consideration should be given” to the appointment of a chair other than the mayor to negate any perceived conflict of interest. The following month the cabinet predictably failed to follow up on the AGC’s wishy-washy recommendation.
Houchen could, and does, now argue that the Tees Valley Review’s recommendation on the makeup of the STDC board has been acted on. He and Gilhespie write at some length in their Governance Statement about the steps that have been taken to ensure a wider and more diverse skills mix on the STDC Board, as the Review and AGC wanted.
But on Houchen’s own position they remain silent, and the mayor remains comfortably ensconced in the chairs of both the TVCA cabinet and the STDC board.
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