Private Eye’s comprehensively detailed and fully evidenced exposé last week of the Teesworks saga [“Stripped Tees” in No 1660], makes for shocking reading. The story it tells reads like the screenplay for a dark political drama, one in which public money and public assets have been shockingly exploited and public trust has been completely eroded. The scale and gravity of what has been exposed demands a full and independent investigation.
The investigative journalist Richard Brooks of Private Eye is to be congratulated for his public service in his determined unearthing of evidence, despite the best efforts of some to frustrate him in his quest for the facts. His findings reveal a disturbing pattern: flawed and determined decision-making, channelling vast sums of public money in particular directions, resulting in colossal financial benefit for the private developer partners, whilst leaving taxpayers carrying the risk.
Across Teesside and beyond, wholly justified concerns have been expressed for many years. The previous Conservative government was wholly supportive and content for huge amounts of public funding to be spent to assemble, decontaminate and remediate vast tracts of industrial land at the taxpayer’s expense. Yet outrageously, that land has subsequently been transferred to a small group of businessmen for nominal sums and for them to then enjoy eye watering profits through further transactions. Through a web of contracts and corporate structures, they were able to profit handsomely while local communities have seen little return.
Instead of using these precious monies for an industrial renaissance and the creation of a wealth fund for the Tees Valley, as originally envisaged by the original members of the South Tees Development Board, the Conservative Mayor and his friends established structures that meant the wealth generated flowed and continued to flow, into the private partners’ coffers.
Investigation is needed
What is now needed is a formal authoritative inquiry and investigation.
The Tees Valley Review, commissioned by then Minister Michael Gove, as a result of my parliamentary intervention on the matter, provided an important but limited account of the governance and decision making. Its findings were nevertheless damning, and it made an unprecedented 28 highly significant, far reaching and significant recommendations. But it had no power to compel evidence, to demand all the documents held beyond the public authorities, or to fully test the veracity of key decisions. It was a review and not an investigation – which, whilst damning, did not fully get to the bottom of the key issues.
The government’s Best Value process, to which the Tees Valley Combines Authority is now subject, and which monitors whether local authorities deliver value for money, is valid and useful. But it is not – and was never meant to be – the kind of forensic inquiry that is truly needed. Only a full investigation can get to the bottom of how public resources were handled and fully answer the questions as to whether those responsible acted properly.
There has been much talk of a National Audit Office inquiry and clearly that hasn’t happened, but I am today calling for the need for an inquiry to be revisited.
There needs to be a formal, independent inquiry with the ability to compel disclosure, to take evidence under oath and follow the money wherever it leads.
If that means inquiring into individuals and private sector entities, then any such inquiry will have to have that power.
The Labour Party previously committed to seeking a National Audit Office investigation but whilst a NAO inquiry would be a positive step, consideration will have to be given as to whether the NAO has the reach to fully investigate into all the dark recesses of the various corporate entities or whether a full statutory judge-led public inquiry would be the right vehicle to properly investigate all these matters.
The problems run deeper than Teesworks alone. Accountability, scrutiny and transparency around devolution funding are far too weak, particularly for Combined Authority Mayors. Once monies are devolved, the systems of scrutiny are simply insufficient, inadequate and not fit for purpose. There has to be something deeply flawed if the government does not have the means to enforce accountability when such massive funds are devolved. This debacle risks undermining the government’s entire devolution agenda if these issues are not confronted.
The fact that the Tees Valley Combined Authority’s accounts have been “disclaimed” without proper audit for two years in a row, should alarm anyone who believes in good governance. And given that the South Tees Development Corporation is now struggling to pay back the debts it has racked up, and is looking to the TVCA for payment holidays, it has to set alarm bells ringing in Whitehall. As Richard Brooks point out in his lengthy article, “There would have been no such trouble if STDC hadn’t handed over the income from its land ( and much else) to Messrs Corney and Musgrave”.
This lack of accountability leaves our region at a disadvantage when seeking further funding and undermines public confidence in devolution itself.
The Mayor of Tees Valley was previously welcoming of an independent inquiry by the National Audit Office. Whether by way of the NOA or a Judge, only a truly independent and uninhibited public inquiry will restore trust, improve financial management and rebuild confidence in the region’s leadership.
If the government concludes that the NAO is the appropriate body for such an investigation, then three parties must play their part. The Government must propose and support it. The Mayor of Tees Valley must consent and the National Audit Office must agree there is a case to proceed and agree to investigate. Whatever the route to a fully independent inquiry, the time for doing so is way overdue.
After the 2015 closure of Teesside’s proud steelmaking industry, we had a once-in-a-generation chance to transform our Tees Valley economy. The vision was for a new hub and cluster of net-zero industries, creating thousands of skilled jobs and in doing so establishing a community wealth fund that would deliver lasting social good. Instead, opaque governance and highly questionable decisions have squandered that opportunity and eroded public trust.
This entire saga has a smell hanging over it. The people of Teesside, Hartlepool and Darlington are no fools. That smell will not go away until there is a full, transparent and independent inquiry. Only by confronting what went on can we begin to restore integrity, accountability and hope for the better future our region deserves.
