Hartlepool and Middlesbrough development corporations (DCs), weighed down by financial pressures and failure to deliver, look set to be scrapped only three years after being set up with £20mn of public funds to drive regeneration of their respective town centres.
Meanwhile, Tees Valley Combined Authority’s (TVCA’s) cabinet is being asked to bail out Hartlepool DC to the tune of up to £1mn to keep it going in 2026/27 and agree that any money Middlesbrough DC has left over should also go to Hartlepool.
Planning powers that were taken over by the two DCs when they were set up in 2023 will return to their local authorities. It will be up to the TVCA cabinet whether to take over the assets of the two DCs, including loss-making Middleton Grange shopping centre in Hartlepool.
Struggles
Tees Valley Mayor Lord Ben Houchen, Hartlepool Council and Middlesbrough’s mayor at the time, Andy Preston, welcomed the establishment of the DCs in 2023, but Labour councillors in Middlesbrough opposed what they called a “smash and grab” of assets.
The DCs have been struggling ever since, in particular with the regeneration of the Gresham area in Middlesbrough and Middleton Grange shopping centre, as reported in North East Bylines by Ray Casey on 25 August 2025 and by this author on 2 November 2025. We reported on 11 February that Middleton Grange was at high financial risk and that Hartlepool DC faced other problems too.
Now Houchen has started a review of the two Corporations he set up with such enthusiasm in 2022/23 to decide whether to scrap one or both of them.
According to a report to the TVCA cabinet on 20 March by Janet McGarry, interim monitoring (legal) officer, the two DCs were established to “unlock stalled sites, streamline planning, and provide a single vehicle for investment and delivery”. If they are abolished there will, according to the same report, be unspecified and unquantified “costs relating to existing contractual agreements that need to be closed out.”
Putting on a brave face
The cabinet report says the two corporations have so far:
- developed regeneration frameworks and masterplans;
- undertaken site assembly activity;
- engaged with landowners, developers and institutional investors;
- advanced early-stage feasibility and business case development;
- granted planning for a number of developments including Gresham and the Hartlepool Waterfront’
- worked closely with host local authorities to align with wider economic and transport strategies.
In relation to Middleton Grange, it says the acquisition of the shopping centre as a strategic intervention to prevent further decline, stabilise the town centre and create a platform for long-term mixed-use regeneration was undertaken “with the clear intention of working alongside Hartlepool Borough Council to reshape the town centre offer, reconfigure retail floorspace, and introduce alternative uses to drive footfall and economic activity. This intervention represented a more direct delivery mechanism than originally envisaged through the DC model alone and demonstrated a pragmatic approach to regeneration delivery.”
Increases in mayoral powers at national level make the Middlesbrough and Hartlepool DCs less necessary, the report argues: “Since the DCs were formed, the national devolution landscape has evolved. Government has confirmed through the Devolution Act that strategic planning powers will increasingly sit with directly elected mayors, including enhanced spatial planning and development management flexibilities.”
Financial sustainability
In spite of its claimed achievements, a separate report to the TVCA says a contribution of up to £1mn to the Hartlepool DC is being sought to ensure its continued financial sustainability and to allow a balanced budget – a legal requirement – to be set when it meets on 30 March.
Any money Middlesbrough has left over will be needed too: “There is a need for the residual funding from Middlesbrough DC to be transferred and the additional £1mn contribution from TVCA to enable HDC to set a balanced budget for 2026/27.”
Challenging economic environment
Houchen said: “Since their creation, the development corporations have helped lay the foundations for regeneration in Middlesbrough and Hartlepool, unlocking sites and securing planning progress.
“However, the context has changed, with new national planning powers for mayors and a more challenging economic environment. It is therefore right that we review governance arrangements to ensure regeneration is delivered in the most effective and sustainable way.
“Our ambition has not changed. Regeneration in Middlesbrough and Hartlepool remains a priority, and we will continue working closely with councils to deliver vibrant town centres for residents and businesses.”
Middlesbrough Mayor Chris Cooke said: “I welcome this review into the future of the MDC. Improving our town centre so that more people live here, work here and visit in their spare time is a key challenge for us as a council and TVCA.
“The people of Middlesbrough rightly expect to see progress and aren’t interested in which body is in charge or takes credit. I just want to get on with the projects that can make a difference and help our town thrive.”
