Government issues statement in support of Teesworks land transfer deals

The transfer of land to private companies in the course of the establishment of the first British free port is controversial. Critics advocate a thorough examination of the tendering process.

The National Audit Office has said a full inquiry into Teesworks is outside its mandate after calls by Labour’s Shadow Leveling Up secretary Lisa Nandy for an investigation to be launched were seized upon by Tory Tees Valley Mayor Ben Houchen.

The plan to “level” a cornerstone of Prime Minister Rishi Sunak’s promise to “level” the region mired in corruption allegations has been defended by the government and prominent Northeast Tory MPs.

Read more: Cross-party calls for Teesworks financial review

The Northern Echo: Rishi Sunak with Ben Houchen at TeesworksRishi Sunak with Ben Houchen at Teesworks (Image: Northern Echo)

The Department for Leveling, Housing and Communities, led by Michael Gove, said land ownership decisions and joint venture arrangements were made by the South Tees Development Corporation (STDC) and the Tees Valley Combined Authority (TCVA).

A spokesman said: “Private sector investment and a joint venture have always been a key part of the approved business model and rationale for public funding of the site and a review by the National Audit Office concluded that government funds were used as intended and the agreements have been amended.” The joint venture has not changed the case for this funding.

“We continue to monitor spending and site delivery.

“The Tees Valley Combined Authority has concluded that the transfer represents good value for money.

“Independent reviews of the STDC’s accounts have raised no concerns about this judgment or the conduct of the organization.”

The government said land transfers by the South Tees Development Corporation are based on market value at the time and do not take into account the broader investments needed to support economic activity on that land.

The National Audit Office (NAO) said its statutory audit mandate does not extend to reviewing the decisions or actions of the Tees Valley Combined Authority or the South Tees Development Corporation.

However, the NAO is understood to be trying to verify relevant documents and on Monday it said that if public funding is to continue next year it will contact government departments and try to verify documents.

However, it added that it would not decide whether to carry out a detailed assessment until those steps were completed.

The Government has stated that the Tees Valley Combined Authority is not currently subject to any “best value” statutory interventions. But Middlesbrough MP Andy McDonald said the government should be forced to act given the widespread concerns.

The Northern Echo: Andy McDonaldAndy McDonald

He said: “While the NAO says an investigation is not within their remit, it is up to the government to make the necessary changes for them to conduct an investigation.”

“The fact that they say so only shows how flawed the overall external audit and oversight of the combined authorities is.

“There is a consensus that an investigation is needed and it is up to the government to implement it.”

Concerns about Teesworks were raised after companies owned by Martin Corney and Chris Musgrave, JC Musgrave Capital, Northern Land Management Ltd and DCS Industrial Limited increased their stake in Teesworks Ltd from 50 per cent to 90 per cent in a share transfer and exited the STDC with ten percent instead of the previous 50 percent.

The Northern Echo: Alex CunninghamAlex Cunningham

At the time, Stockton North MP Alex Cunningham said there was “a worrying and escalating level of waste and shady business” in the area.

However, Mr Houchen said the deal eliminated the taxpayer’s liability for the site – one estimate suggests the redevelopment will cost £482.6million – and allowed the freeport to attract hundreds of millions in private cash secure pounds.

Continue reading: Ben Houchen answers questions on the Teesworks website

Speaking during the Prime Minister’s Question Time today (Wednesday), Simon Clarke, MP for Middlesbrough South, said: “We have seen a shameful attempt to denigrate the magnificent Teesworks project being led by the Honorable MP for Middlesbrough, who I have notified in advance .”

“Will he (Deputy Prime Minister Oliver Dowden) confirm that it has always been an integral part of the business model that the private sector should invest alongside the government and that the Teesworks agreements themselves have been reviewed and approved by the government?

“And will he again reiterate his full support for the Teesworks project, reassure investors and join my call for the Labor Party to apologize for belittling Teesside?”

In response, Mr Dowden said the freeport attracts “billions of pounds” in private sector investment, creates jobs and supports the local economy.

He said: “I think the whole House of Representatives will see through the Labor Party’s inexcusable attempts to downplay achievements in Teesside, where local leaders are working tirelessly to improve this region for the first time in a generation.”

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The Northern Echo: Dehenna DavisonDehenna Davison (Image: Contributor)

Meanwhile MP Dehenna Davison, Parliamentary Secretary of State for Leveling Up, wrote to Mr McDonald in response to his allegations of corruption and illegality.

She said: “There is an unavoidable risk that continued unfounded questions will result in investment in the region, including in Freeport, being dampened, threatening job creation and hurting leveling.”

“I would be delighted to meet you, along with my officials and other ministerial colleagues, to discuss how government funds have been used to support the development of the South Tees Development Corporation site and to consider any evidence you provide on this.” We have not been given the date, nor are we aware that you have provided any evidence since you made your claims.”

Continue reading:

Mr McDonald insisted his concerns were genuine, dismissed suggestions they were partisan and reiterated his calls for an investigation.

He said: “As for the Tories blaming Labour, which is completely ridiculous, they simply have to accept that there are very serious and legitimate concerns about the way business has been conducted.”

“These issues will not go away and must be addressed in an open and transparent process to chart a future path for the project that we can all have confidence in.” Government issues statement in support of Teesworks land transfer deals

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