Three independent members of Hartlepool Mayoral Development Corporation (HDC) have resigned and those that remain face strategic risks including to their ability to meet their statutory responsibilities, maintain effective governance and deliver agreed priorities, a board report warns.
At the heart of HDC’s problems is the town’s Middleton Grange shopping centre (MGSC), where footfall is falling against the national trend, though numbers are small in both directions. There will be an estimated deficit of £1.2mn this year, which officials are working with the HDC’s private sector property managers JLL to reduce.
If tighter control of maintenance and operational budgets and proactive asset management aimed at improving income to offset rising costs prove insufficient, the board paper warns, “the corporation will need to seek additional financial support from the TVCA cabinet.”
Governance
The HDC board will meet on 28 April when it will be told that three independent members have resigned, leaving a total of seven including the chair, Pamela Hargreaves, appointed in January, who is also leader of Hartlepool Council.
One of the seven, Shane Moore, is standing down as a councillor of 7 May. Minimum membership of the board under the TVCA constitution is six. Attendance at the last meeting on 30 March was five. Members are appointed by the Tees Valley Mayor, Lord Ben Houchen.
In addition to these issues with board membership, the HDC’s audit and governance (or risk) committee (AGC) also presents problems. “There is a risk that the AGC may not consistently maintain the appropriate mix of membership, independence and skills required to operate effectively,” according to the latest HDC risk register. “A governance review is underway to strengthen committee effectiveness, including development of a skills matrix, recruitment and appointment arrangements, and enhanced induction and refresher training. This will support a more consistent and effective approach to governance and oversight.”
The HDC’s AGC has no specified number of members, but it must have an independent chair who is not a member of the board and one member of the Tees Valley Combined Authority’s AGC. There are currently three members. It gets a red rating in the risk register.
Risk register
The register highlight three other problem areas with a red rating –
- financial pressures and funding constraints may impact HDC’s ability to maintain a sustainable medium-term financial position aligned to its priorities…A structured financial and strategic review is underway to align resources with delivery priorities and the emerging operating model. This includes ongoing financial monitoring, review of funding requirements and integration of financial planning with wider strategic decision-making. This work will inform a sustainable medium-term position;
- strategic direction and the masterplan may not be sufficiently clear, prioritised or aligned to current constraints, impacting deliverability…A structured strategic reset is underway in collaboration with TVCA to refine priorities, align the masterplan with the delivery pipeline and investment strategy, and confirm a clear forward position. Regular reporting to the board has been established to support oversight and decision-making.
Middleton Grange
- changes in market conditions and operating costs may affect the commercial performance of MGSC…Active asset management arrangements are in place, supported by regular financial and operational monitoring. An asset manager has been appointed to strengthen oversight and performance management. Ongoing review work is being undertaken to inform the future commercial approach and ensure alignment with wider financial and strategic considerations.
Separately, there is an amber rating for MGSC –
- property management and contract oversight arrangements may not consistently deliver expected performance and compliance…A review of governance, reporting and contractual oversight arrangements is underway to strengthen performance management and compliance. This will support clearer accountability and more consistent delivery of expected standards (completed in March with ongoing oversight).
HDC bought MGSC on a long lease in December 2023 with part of its £10mn allocation from TVCA. Mayor Houchen was chair of both TVCA and HDC at the time.
Options for the future of the market hall and the closed vehicle ramp continue in conjunction with options for the regeneration of the wider Middleton Grange area.
Marketing campaigns have been carried out and events held, but the total number of visitors to the centre was 4,404,154 in 2025, a fall of 1.5% compared with 2024 while the UK average was up by 0.5%. A new business plan is currently being produced.
HDC admits it does not have the internal expertise to proactively manage the MGSC and ensure continuity of rent collection, service charge management and general property management. This is mitigated with the appointment of JLL as property managers. Nor does it have the internal expertise to strategically manage the MGSC asset – again mitigated by the appointment of JLL alongside experienced letting agents and legal advisors.
Micro and macro-economic conditions may deteriorate leading to additional tenants vacating units or entering liquidation and this may reduce net income to a deficit level, a board paper warns. “This risk will continue and is inherent to the retail asset type. This is partly mitigated with increasing marketing activity to attract footfall, a proactive asset management and reletting strategy to stabilise and grow income, pending ongoing review of the asset as part of the forthcoming wider plans.”
There are three other amber ratings for the development corporation as a whole (not MGSC specifically) covering delivery capacity and operating model; asset transfer, stewardship and liability management; and planning function.
Summary
The board report states: “A number of risks remain above target at this stage, particularly in relation to strategic alignment, organisational capacity and financial sustainability, including the position of MGSC. This reflects the current period of transition, including ongoing strategic review activity and the evolving operating model for the development corporation.
“These risks are recognised and are being actively managed through a programme of structured review, governance strengthening and alignment of priorities and resources. The register provides a clear view of those areas requiring continued focus and oversight as this work progresses.”
