Mayor: Inquiry sets out in black and white there is no corruption at Teesworks

The elected mayor behind the Teesworks scheme has said an official report “sets out in black and white” that there is no corruption or illegality linked to the project.

But the long-awaited 97-page report into Teesworks – one of Europe’s biggest brownfield regeneration sites – did criticise its governance and transparency and found that some decisions were not of a high enough standard when managing public money.

The development scheme, driven by Tees Valley’s mayor and Tory peer Ben Houchen, was subject to an inquiry by three senior local authority officers, ordered by Levelling Up Secretary Michael Gove.

Their report, published on Monday, stated: “We have found no evidence to support allegations of corruption or illegality.

“However, there are 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.”

Lord Houchen said: “The people of Teesside, Darlington and Hartlepool can welcome this investigation, which sets out in black and white that there is no corruption or illegality at Teesworks.

“The investigation was thorough, wide-ranging and detailed.”

Levelling Up Secretary Michael Gove
The development scheme was subject to an inquiry ordered by Levelling Up Secretary Michael Gove (Jane Barlow/PA)

He welcomed the inquiry’s recommendations on transparency and said he would work to make improvements.

Lord Houchen said the inquiry had recognised that working with private partners in a joint venture had been necessary for the scheme to progress.

“Without this partnership, the former steelworks would still be sat idle, costing the taxpayer £20 million a year to stand still, with no investment and not a single job in sight,” he said.

“It also dispels the myth that we sold the land for just £1, with the panel confirming the deal was actually worth £39 million to the taxpayer.”

Concerns about the Teesworks project were previously raised by Middlesbrough’s then-Labour MP Andy McDonald in the Commons, who alleged “truly shocking, industrial-scale corruption” related to the scheme.

Lord Houchen accused Mr McDonald of lying in Parliament “in an attempt to sabotage the opportunities we’ve worked so hard to deliver, which has caused significant damage to investment, me personally, my organisation, and most importantly Teesside, and the opportunities of hard-working local people”.

“However, we are now in a position where a huge demolition programme has been completed, construction is under way on major projects and we are building a new future in industries such as steel, green energy and carbon capture,” he said.

“I will continue to focus all of my efforts on delivering investment, creating jobs for local people and creating opportunities for our community – and I’ll continue to build on the 9,000 jobs that we’ve already created to keep moving forward with transforming our region for generations to come.”

The panel investigating stated they had faced “challenges” in accessing information and that the level of transparency had not always met the standard appropriate for a publicly funded project of this scale.

Their report said: “Consistently throughout the review, the panel received concerns about openness and transparency.”

The inquiry also noted that “the limited access to information is a key factor in driving the concerns about the decision-making process”.

Lord Houchen, who chairs the South Tees Development Corporation which oversaw the Teesworks site and who originally requested the inquiry, had always denied allegations of corruption.

Making a statement in the Commons, communities minister Lee Rowley said: “This independent review has cleared the Tees Valley mayor and combined authority of lurid allegations of corruption and illegality.

“It has recommended improvements that I am confident will be driven by local stakeholders.

“We are delighted to support a project that is bringing huge benefits to the people of Teesside and the rest of the UK.”

Angela Rayner, Labour’s deputy leader and shadow levelling-up secretary, said: “This long-delayed report provides a scathing assessment of Conservative mayor Ben Houchen’s mismanagement and bad governance at Teesworks.

“It has delivered such poor value for money for taxpayers that it is no wonder the Tory Government wanted to bury it.

“Michael Gove must finally take responsibility and urgently refer this case to the National Audit Office.

“Many questions remain and people on Teesside deserve answers. It is their money at risk here, not that of private developers.

“The steelworks are part of the civic inheritance for people on Teesside and have transformative potential, but taxpayers now need to see real action and change to ensure this Tory saga is never repeated.”

Independent MP Mr McDonald, who has been suspended from Labour since November over what the party said were “deeply offensive” comments at a pro-Palestine rally, backed Ms Rayner’s call for the public spending watchdog to carry out is own inquiry into Teesworks.

Andy McDonald
Independent MP for Middlesbrough, Andy McDonald (Peter Byrne/PA)

Facing calls from senior Conservatives to apologise and even resign from Parliament over accusations made about the scheme in April, Mr McDonald said there were “huge questions still to unravel” following the report’s publication.

In a statement, he said: “This report is absolutely damning and what is clear is there are massive concerns about governance and finance, oversight, scrutiny, value for money – all of the things that I have said over these years.

“The system is completely flawed and as a net result we have got the enrichment of a handful of businessmen making money hand over fist at no risk whatsoever.”

The Teesworks and freeport project aims to redevelop Redcar’s former steelworks in the north-east of England for green industry.

It was set up as a joint venture between the South Tees Development Corporation and companies run by two local developers, but was then transferred to majority private ownership in late 2021.

Profits tripled to £54 million in the year to March 2023 after the private sector companies increased their stake to 90%, the Financial Times reported earlier this month.