Gove to select independent panel to investigate Teesworks “corruption” allegations

The Secretary of State for Levelling Up, Housing and Communities, Michael Gove, has ordered an independent review of the South Tees Development Corporation (STDC) and the Teesworks redevelopment scheme.

Gove issued the order in response to a request from Tees Valley Mayor Ben Houchen, following media reports and debate in Parliament that questioned a land sale made by the STDC, which Houchen chairs.

The STDC is a mayoral development corporation set up to promote economic development and business growth in South Tees and has powers to invest in infrastructure, attract new business and coordinate land ownership through land acquisition and the use of compulsory purchase powers.

The Tees Valley Mayor, the Leader of Redcar and Cleveland Borough Council, and the Mayor of Middlesbrough are statutory posts on the STDC Board.

One of STDC's largest projects involves the regeneration of the Teesworks site, to which the allegations relate.

Houchen contacted Gove on 16 May to ask for an independent inquiry specifically over concerns regarding allegations made in Parliament by Andy MacDonald MP.

In his 16 May call for an investigation, Houchen said: "For too long people have been making allegations against STDC and its Joint Venture partners.

"This site was valued independently for minus £482m, the former MP for Redcar and Trade Unions at the time said the clear up would cost the taxpayer £1bn. Fast forward a few years and we're seeing construction of a new quay, the world's largest monopile facility and thousands of jobs being created. It's a stark contrast to where we were even a few years ago.”

He added: "Ever since the claims were made in Parliament, we've been constantly reassuring our investors, as well as those bringing the claims and the local people of Teesside that we are doing everything that is appropriate and expected of a public body."

Responding to Houchen in writing on 24 May, Gove said the Department for Levelling Up, Housing and Communities had "seen no evidence of corruption, wrongdoing, or illegality".

"This is still the case. Nonetheless, opposition have continued to call for an inquiry," he added.

He said he had considered calls for an independent investigation to be led by the National Audit Office (NAO).

“It is not, however, the NAO’s role to audit or examine individual local government bodies and its powers would not normally be used for that purpose. I do not think it would be appropriate to expand so significantly the role of the NAO by asking them to lead this inquiry. Nonetheless, I would welcome the NAO updating its review of Government’s funding arrangements for STDC,” Gove said.

The Secretary of State concluded instead that he should take the "exceptional" decision to support the commissioning of an independent review to consider the allegations made and Tees Valley Combined Authority’s oversight of the STDC and Teesworks joint venture.

Gove will appoint the panel and will ask it "to address the accusations directly". The panel will also report on the governance arrangements at STDC, including how decisions are made, and investigate the value achieved for the investment of public money on the site.

Interested parties and members of Parliament will be invited to make representations to the panel.

But the announcement was met with criticism from Labour MPs, who called into question Gove's approach.

In response, Andy MacDonald stated that the plan "falls way short of what is needed and what was demanded, which was an inquiry conducted by the National Audit Office, independent of government.

"Instead, it is Michael Gove who will commission an 'independent review' and it is he who will appoint the panel of people to investigate Teesworks and the STDC."

He added that "only an independent inquiry by the NAO will suffice".

The Shadow Secretary of State for Levelling Up, Housing and Communities, Lisa Nandy, also raised questions and noted that the NAO has the "experience, capacity and independence to carry out the investigation".

Responding to the Secretary of State’s decision, Ben Houchen said: “I welcome the Government agreeing to my request for an independent review into the Teesworks project, including the involvement of the NAO.”

The Tees Valley mayor said he felt the allegations made in Parliament were starting to have a negative impact on the prospects of Teesside and the local community.

“I feel that an independent review is necessary to show investors, businesses and local people that there is no corruption, wrongdoing or illegality in what has become and continues to be an incredible project for jobs and investment in our region,” Houchen said.

“I look forward to the outcome, in due course, and will be making no further comment until the independent review has been completed, so to allow the independent body to carry out their work without influence or favour. My officers stand ready to provide any and all information requested by the independent review.”

Adam Carey