South Tees Development Corporation (STDC), still chaired for a few more days by Tees Valley Mayor Lord Ben Houchen, has managed to appoint a new chief executive at a third attempt after a shambolic appointment process.
The procedure for getting John Barnes, previously STDC’s chief operating officer, into his new position was held up twice – once by an inquorate board meeting and then by an “administrative error” which left the board without the official report it needed to make its decision.
The result was that in order to avoid failing to meet a statutory obligation Houchen had to use delegated powers under the STDC constitution – twice – to make urgent decisions to appoint Barnes on an interim basis and then extend the interim appointment,
These problems came after the board held no meeting at all for more than three months while significant events affecting its future were taking place. Barnes’ appointment was finally confirmed unanimously by the board on 10 June – more than three months after being publicly announced (subject to board approval) on the TVCA website
Background
Barnes’ predecessor, Julie Gilhespie, was group chief executive responsible for Tees Valley Combined Authority (TVCA) and STDC as well as Middlesbrough and Hartlepool development corporations. Significantly, her role also encompassed that of head of paid service, a post which public bodies like these are statutorily required to have.
The TVCA cabinet heard on 31 January that the group chief executive post was in danger of becoming redundant as work on major STDC projects reduced. After consulting Gilhespie, redundancy was confirmed on 28 February with three months’ notice, reduced to one month by agreement.
The STDC board, having not met since 5 December 2024, arranged to meet on 27 March, just four days before it would be without a chief executive and, even more importantly, a legally required head of paid service. But when the members got together they did not have a quorum.
Mayor Houchen, using delegated powers under the STDC constitution, appointed Barnes, then STDC chief operating officer and most senior employee after Gilhespie, as interim head of paid service until 4 April, when another meeting was called.
That meeting was quorate but astonishingly (or “unfortunately”, as the board paper puts it, due to an administrative error), the relevant official report was omitted from the board’s meeting documents. so once again members were unable to make a decision.
Houchen stepped in once more to use his delegated power to extend Barnes’ interim appointment until the next board meeting on 10 June when he was appointed to the role of STDC chief executive (head of paid service). TVCA has its own interim chief executive and head of paid service following Gilhespie’s redundancy.
Conflict of interest
One further point of interest remains a mystery, giving rise to inevitable speculation. At the 4 April board meeting the head of legal services reported that a letter had been received from two of the directors of Teesworks Limited in respect of a conflict of interest they had identified.
Exactly what the conflict-of-interest concern was is not stated. The public report says: “During an informal discussion with board members, it was explained that a decision in respect of this matter was required earlier than it was possible to arrange a quorate meeting of the board. As such, and in accordance with Paragraph 19 of the STDC Constitution, an urgent decision in respect of this matter has been taken.
“A copy of the urgent decision record is attached to this report at Appendix 1. Appendix 1 is exempt from publication at this time, as it contains information which could affect ongoing commercial negotiations.”
What commercial negotiations?
Teesworks is a private company which is 90% owned by two local businessmen, the so-called joint venture (JV) partners, Chris Musgrave and Martin Corney, and 10% owned by STDC on behalf of the public. The only other director is Barnes, who took over that role from Gilhespie on 13 December 2024.
Two out of Musgrave, Corney and Barnes must logically have been the complainants about a conflict of interest, but we don’t know which two or exactly what about.
Gilhespie was in almost exactly the same position between July 2020 and December 2024 as Barnes is now, doubling up as a Teessworks director and TVCA group chief executive, without, as far as is known, giving rise to concerns of conflict of interest – at least not from the directors of Teesworks.
Perhaps there is a clue in the “ongoing commercial negotiations” mentioned in the report referred to above, which is exempt from publication. Looking on the bright side, perhaps talks are going on to fulfil recommendation 22 of the Tees Valley Review, set up under the previous government to look into governance at the TVCA group, which said that “STDC should explore opportunities to influence when and how land is drawn down and developed and, if possible, renegotiate a better settlement for taxpayers under the JV agreement.”.
Perhaps talks are taking place between STDC and the JV partners to follow up a letter which Musgrave and Corney sent to Gilhespie on 17 September 2024, with reference to recommendation 22. While stating that the JV agreements were legally binding, they did make an offer to vary the terms in some respects, including the length of their option over the Teesworks land.
Musgrave and Corney also offered in that letter to produce a detailed summary of current contractual commitments or reinvestment secured in the Teesworks estate “to provide further assurances to wider government bodies,” adding: “Clearly this is commercially sensitive information and could not be publicly disclosed.”
Who is John Barnes?
Barnes, aged 48, is an experienced company director, including with Duchy Homes, Bellway Homes and Miller Homes. He was appointed chief operating officer of STDC in May 2024, four months after the Tees Valley Review had reported its damning findings. He is an important part of Tees Valley’s plan to respond to the criticisms and recommendations in the Tees Valley Review and the government’s expectations.
According to the Tees Valley website: “With more than a quarter of a century of experience in development, regeneration and infrastructure projects, Mr Barnes will take on the role as part of moves to separate leadership arrangements for TVCA and the South Tees Development Corporation (STDC).
“The appointment comes as part of TVCA and STDC’s response to the Tees Valley Review, detailed to government in September last year.
“It complements ongoing efforts by TVCA to address the non-statutory Best Value Notice issued by the government in April this year, the plans of which will be presented to TVCA cabinet next month. One of the recommendations of the Tees Valley Review referred to ensuring organisational boundaries between the TVCA and STDC were maintained.”
Barnes says on the website “I’m very pleased to take on the role of chief executive with the backing of the board. The huge progress being made across the Teesworks site is great to see – and the development corporation has played a key role in this alongside our Teesworks Ltd joint venture partners.
“We continue to play an important role in the delivery of key projects and infrastructure across the site, engaging with government and ensuring we continue to see major projects, like Net Zero Teesside Power, delivered across the site.”
The TVCA/STDC press office was approached but has not replied.
