The Teesworks scandal has set back Tees Valley Combined Authority’s (TVCA’s) hopes of a double funding boost, it has emerged from Budget documents published or updated by the government.
The area was in line for a so-called Integrated Settlement, which would have given Mayor Lord Ben Houchen and his cabinet greater freedom to decide how to use their funding, and to have an Investment Zone confirmed. But neither materialised in the Budget.
When Chancellor Rachel Reeves announced which mayoral combined authorities (MCAs) were to receive Integrated Settlements, Tees Valley was not mentioned. Greater Manchester and West Midlands will lead the way in 2025-26, followed by the North East, South Yorkshire, West Yorkshire and Liverpool City Region the following year. Ministers are to discuss applying the policy to Greater London “taking into account the capital’s unique devolution arrangements.”
Failure to meet criteria
The reason for Tees Valley’s exclusion are not spelled out explicitly, but seem clear enough: it failed to meet the eligibility criteria because the independent Tees Valley Review set up last year by former Levelling Up Secretary Michael Gove, and published in January, found “issues of governance and transparency that need to be addressed and a number of decisions taken by the bodies involved do not meet the standards expected when managing public funds.”
This made it virtually impossible for Tees Valley to meet the criteria for an Integrated Settlement when the government applied them to MCAs ahead of the Budget. To be eligible for the Integrated Settlement, an MCA had to meet a “series of objective criteria related to their track record of financial management.” These criteria included that:
- in the last 18 months, the MCA has not been the subject of a Best Value Notice, a MHCLG (Ministry of Housing, Communities and Local Government – successor to Gove’s Levelling Up Department)-commissioned independent review or a statutory inspection or intervention;
- the MCA is not subject to any ongoing (or implementing recommendations from an) externally mandated independent review;
- there are no material accounting concerns covering the current or previous financial year which relate to the MCA’s ability to manage public money.
If an MCA meets the above criteria, “the government will further consider the devolved authority’s track record of managing major programmes.” It is not surprising that Tees Valley did not pass these tests.
Investment zones
Tees Valley was also one of eight combined authorities in England invited at the time of the Spring 2023 Budget to co-develop Investment Zones with the government. The others were Greater Manchester, Liverpool, North East, South Yorkshire, West Midlands, West Yorkshire and East Midlands. All eight, the government said, were expected to start operating in 2024-25.
The Zones will, the government says “deploy a range of interventions – including tax reliefs, planning mechanisms and innovation, skills and business support – to unlock opportunities for business and address barriers to private sector growth, creating more high-quality jobs for communities across the country.”
The Zones will build on each area’s existing strengths in at least one of five priority sectors: advanced manufacturing, creative industries, digital & tech, green industries and life sciences.
The North East Investment Zone, for example, will support new investment and innovation in electric vehicle manufacturing, battery production, offshore wind and low-carbon materials, building on the region’s longstanding strengths in automotive and advanced manufacturing and increasing prominence as a hub for clean energy.
Key locations include: Blyth Energy Central, International Advanced Manufacturing Strategic Site in Sunderland/South Tyneside, Tyne Powered Economic Corridor and NETPark in County Durham.
But while similar plans were announced for the other MCAs, an updated government document published in connection with Budget refers to Tees Valley simply as “a prospective Investment Zone”. The Zone, it adds: “will focus on the digital technology and creative sectors across Hartlepool and Middlesbrough, with benefits for the wider region. Further details will be provided in due course.”
No reason is given why the Tees Valley Investment Zone has fallen behind the others, but it is hard not to conclude that the Teesworks affair and the failings revealed by the independent Tees Valley Review are not behind the delay, as they are in the case of the Integrated Settlement.
