Key questions about the Teesworks scandal remain unanswered after Tees Valley Mayor Lord Ben Houchen and the Tees Valley Combined Authority (TVCA) which he chairs refused to reply to almost one third of the questions submitted by members of the public at a recent scrutiny meeting.
Principal among the unanswered questions was how two local businessmen, Chris Musgrave and Martin Corney, came to have their share in the Teesworks redevelopment site increased from 50% to 90% at the expense of the public-sector South Tees Development Corporation (STDC) which saw its share drop from 50% to 10%.
Two questions about the transfer of the shares were among 62 put by the public at a meeting of the TVCA Overview and Scrutiny Committee (OSC) on 4 September. Both met with the same reply: “This decision was made by the STDC board and not TVCA Cabinet.”
This stonewalling response shows that TVCA is holding tenaciously to its view that while its OSC can scrutinise decisions by the Cabinet to fund the STDC its reach does not extend beyond that into the STDC itself. This is in line with advice councillors were given by the TVCA monitoring (legal) officer in 2021 but challenged by independent legal advisers this year, as reported by North East Bylines in August.
There is therefore still no explanation from Houchen, TVCA, STDC or their officials as to why the share transfer was agreed. We do, however, have the views of the Tees Valley Review and that of the two businessmen.
Tees Valley Review
The Review was set up by former Levelling Up Secretary Michael Gove following revelations in Private Eye and allegations of corruption in the House of Commons by the (now) Middlesbrough and Thornaby East MP Andy McDonald. When it reported in January the Review revealed that £560mn of public funding had been poured into Teesworks, which is one of the largest, if not the largest, brownfield remediation projects in Europe.
While the private partners in the Teesworks joint venture (the JV partners) had pocketed £45mn in profit and held another £63mn in cash without making any financial investment, with none apparent in the near future, the Review reported, TVCA and STDC – both chaired by Houchen – had run up debts of hundreds of millions on behalf of the taxpayer without much awareness of what they were doing, as reported by North East Bylines in February.
The Review made 28 recommendations and Gove gave Houchen until September to let the government know how he intends to implement them. TVCA will, it is intended, agree its response to the government at a series of meetings this month, having started with the OSC on 4 September.
Sceptical members of the Review panel had been told that the key driver for the share transfer from the STDC to the businessmen was the stated need to accelerate the remediation process in order to more fully exploit the tax concessions associated with the Freeport status which had been announced in March 2021. In turn, the consequence of acceleration would be a faster depletion of the available public funds for regeneration, and due to the finite nature of public funding the only source of further funding would be from the private sector.
The businessmen claimed at a meeting with TVCA chief executive Julie Gilhespie on 8 August and reported in North East Bylines that the public sector would not own all the land if it wasn’t for their involvement and would still be wasting tens of millions a year safeguarding the site, with none of the current development underway. They also said that the 90/10 split between the JV partners and STDC fully reflected the development liabilities being transferred, which ran into the hundreds of millions.
Behind closed doors
So we have the JV partners’ view of the deal and we have the Tees Valley Review’s findings. Their consensus, coming from different angles, is that the JV partners got their share of Teesworks in return for their “leverage” is acquiring the land. What we still don’t have, directly from those involved – Houchen and his officials – is their explanation of why they thought this leverage was worth 90% of the project.
Nor do we know what was said on the subject at behind-closed doors briefings for the TVCA Cabinet, scrutiny and audit committees in April, May and July – and we are not going to be told. The response to a question from a member of the public as to whether the minutes of these briefings would be published is, in full: “No, the briefing sessions were not open to the public. It (sic) provided members with an opportunity to consider and discuss key issues, which members may have felt unable to share in a public forum. However, decisions relating to the recommendations will be taken in public.”
Other unanswered questions
The questions about the share transfer were only two of 19 public questions to be “rejected” at the OSC meeting on 4 September. Sixty-two public questions were submitted in writing, as reported in North East Bylines on 6 September by Julia Mazza and Ray Casey. All the questions and responses are now on the TVCA website.
Reasons for rejecting other questions were that they were not relevant to the meeting agenda; or required clarification; or were not relevant to the Review; or should be dealt with under the Freedom of Information Act; or that the necessary information was still being collated; or that the questions were “frivolous”. One question relating to the Business Board (formerly the Local Enterprise Partnership) was rejected because it was not a public body.
The supposedly frivolous questions dealt with recruitment methods for STDC staff, including a question about measures to protect against cronyism; and why the decision to move from a 50/50 to a 90/10 division of Teesworks between STDC and the JV partners was not signed off by the monitoring (legal) officer.
Comment
Houchen and the TVCA Group have learned nothing from their sorry experience with Teesworks, certainly as far as transparency is concerned. There may be good reasons for not answering some of the 62 questions asked by members of the public immediately. But an indication could have been given at the scrutiny meeting that information would be provided in due course. Instead, the impression was of minimal information having to be dragged out.
Perhaps it is true that some information may still be in the process of being collated; but an undertaking could have been given to post it on the website when available. Perhaps some questions did require clarification; if so officials should have sought clarification rather than using this as an excuse for not answering. Perhaps an agenda item on the Tees Valley Review was not the right moment to ask questions about the airport; but an indication could have been given that the airport would be favourably considered as an agenda item next time.
Describing some questions from the public as frivolous was just insulting. It showed contempt for some of those whom the mayor and Authority are there to serve
Above all perhaps, adhering stubbornly to the policy of not allowing scrutiny of STDC and by extension of other subordinate bodies of TVCA – the airport and the Middlesbrough and Hartlepool development corporations – will leave important parts, some would argue with justification the most important parts, of the mayor’s empire beyond scrutiny.
For make no mistake, an empire is what Tees Valley has become under Houchen. The scholar Robin Hambleton drew a distinction in 2015 between the mayor as facilitative leader and the mayor as city boss. Few can doubt that in Houchen, Tees Valley has elected a city boss*.
The Tees Valley Review did not find evidence of corruption in the Teesworks affair. But it did find a lack of transparency. The Local Government Association (LGA) is to provide independent oversight of the implementation plan for responding to the Review and undertake workshops with officers and members to support the embedding of the necessary culture. If the reluctant attempt to answer the public’s questions at the OSC on 4 September is anything to go by the LGA will have its work cut out.
*Leading the Inclusive City: Place-based Innovation for a Bounded Planet. By Robin Hambleton. Published by Policy Press.
CLICK HERE TO DONATE TO OUR CROWDFUNDER
HELP US BECOME STRONGER SO THAT WE CAN CONTINUE TO DELIVER POWERFUL CITIZEN JOURNALISM!
