More new documents from Tees Valley Combined Authority (TVCA) reveal how backbench councillors are continuing to be denied the right to scrutinise the activities of South Tees Development Corporation (STDC) and Teesworks Ltd, which are responsible for regenerating the former Redcar steelworks site – the largest brownfield regeneration site in the UK and possibly in Europe.
Members of the TVCA’s overview and scrutiny committee (OSC) were told at their meeting on 4 September that they had no powers to review the decisions of Teesworks (“the entity”),
This is in spite of the fact that a reported £560mn of public funds in grants and borrowing has been poured into the site by TVCA via STDC, both of which are chaired by Tees Valley Mayor Lord Ben Houchen.
It is also out of line with independent legal advice that there is potentially no real impediment to the OSC or TVCA in being able to undertake or require appropriate oversight to enable value for money to be delivered and evidenced through effective scrutiny of significant decisions.
Private entity
When OSC members asked for clarification of their relationship and rights in relation to Teesworks they were told that “Teesworks was a private entity and whilst there was partial public ownership there was no direct ownership[ of this entity by the committee…As part of the independent Tees Valley Review (see below) the entity’s audited accounts were to be provided to the TVCA; however, the OSC had no power to review the decisions of the entity” according to the draft minutes of the 4 September meeting.
When OSC members challenged this and expressed the view that with public funding flowing into STDC there should be opportunities to scrutinise the activities of Teesworks they were told, the draft minutes record, that “public finance only flowed to STDC via TVCA. Finance was discharged by STDC through the obligations of the corporation [STDC). No finance was provided directly to Teesworks Ltd.”
Some OSC members did not give up but “expressed concern about significant asset transfers that had been in public hands and as such felt that opportunities to scrutinise should exist.” The draft minutes give no commitment on this point.
The best that was offered to the councillors was that if they asked for information from the STDC board and the board refused then it “should” get a full explanation for the refusal. When members pointed out that they had a constitutional right to an end-of-year report and accounts from STDC but had not received them – nor had the TVCA Cabinet – officials undertook to ensure that future updates would be provided.
Background
The OSC meeting took place almost eight months after publication of a report by the independent Tees Valley Review into Teesworks set up by former Levelling Up Secretary Michael Gove following allegations of corruption in the House of Commons by Andy McDonald, (now) MP for Middlesbrough and Thornaby East, and revelations in Private Eye.
The Review, as reported by North East Bylines at the time, did not find evidence of corruption but did find that “there are issues of governance and transparency that need to be addressed and a number of decisions taken by the bodies involved did not meet the standards expected when managing public funds.”
In particular, it is not known why Houchen and the STDC thought it worthwhile handing over, eventually, a 90% interest in Teesworks to private developers (the joint venture – JV partners) in return for their “leverage” in acquiring the steelworks site, or how that decision was reached.
The OSC noted that a response from the JV partners to the TVCA Group’s request to consider varying their contract with STDC was still awaited, and the OSC reserved the right to hold another meeting before the next TVCA Cabinet on 27 September, depending on the nature of the JV partners’ response
Other scrutiny issues
The independent Review made 28 recommendations as a result of its Teesworks investigation and OSC members want to track progress in implementing them. The OSC is already due to receive a report in November on tracking its recommendations on other matters in 2023-24 and passed a resolution that this should now include recommendations associated with the Review. There is no indication whether this will happen.
The OSC also wants the mayor to be required to attend the OSC at least twice during a municipal year, in line with a recommendation from the Centre for Governance and Scrutiny, and a public mayor’s question time every three months with an independent chair. Whether these suggestions will be accepted is also unknown.
The mayor has met this requirement in the past year, though neither he nor TVCA chief executive Julie Gilhespie was at the 4 September meeting.
Successes
While TVCA dug in its heels over allowing the OSC to scrutinise STDC and Teessworks, the backbenchers did have at least one minor success on a side issue. Though the independent Review dealt only with the relationship between TVCA and STDC, any so-far unspecified changes that are made as a result will also apply to other mayoral development corporations in Tees Valley of which there are currently two – Middlesbrough and Hartlepool. No mention is made of Teesside International Airport, however.
In spite of all these continuing problems, the OSC surprisingly recorded that things are getting better on the scrutiny front: ”The committee noted an improved working relationship between members and officers”, record the draft minutes, “with changes to the approach to scrutiny supporting the committee’s aims. There had been a more strategic approach to the committee’s activities with work programming and engagement with Cabinet which had fostered a positive relationship.”
CLICK HERE TO DONATE TO OUR CROWDFUNDER
HELP US BECOME STRONGER SO THAT WE CAN CONTINUE TO DELIVER POWERFUL CITIZEN JOURNALISM!
