Michael Gove confirms that Teesworks’ investigation will be launched
In recent weeks, pressure has increased on the Government to launch an investigation into the site after Labour’s Shadow Leveling Up Secretary Lisa Nandy called for a review and Tees Valley Conservative Mayor Ben Houchen repeated her request later that same day.
The Leveling Up secretary said that since “serious allegations of corruption, misconduct and illegality have been made,” he will ask an independent panel to “address those allegations head-on and report on the governance arrangements at STDC, including the manner in which it is governed.” how decisions are made”. as a look at the value achieved by investing public money in the site.
Mr Gove said: “I have considered calls for the National Audit Office (NAO) to lead such an investigation. However, it is not the job of the NAO to audit or scrutinize individual local government bodies and its powers would not normally be used for this purpose.
“I don’t think it would be appropriate to expand the NAO’s role so significantly by putting it in charge of this investigation. Still, I would like to see the NAO update their review of government funding arrangements for STDC.
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“Given the importance of addressing this matter to you and Teesside, I have taken the extraordinary decision to support the commissioning of an independent review to address the Tees Valley Combined Authority’s specific allegations and oversight of the Joint STDC and Teesworks venture to be explored.
“As set out above, this is not because I have been told there is evidence to recommend such a review, but because of the response to your May 16 inquiry. In line with standard practice, I will appoint a panel to conduct an independent, external review.
“As serious allegations of corruption, misconduct and illegality have been made, I will ask the panel to deal directly with these allegations and to report on the governance arrangements at STDC, including how decisions are made and also to check the value achieved.” Investment of public money on the site.
“I will publish detailed service descriptions shortly. I will invite all interested parties, including Members of Parliament, to present their evidence before the panel. The report and any recommendations will of course be made public as part of normal practice.”
Mr Houchen said: “I welcome the Government’s approval of my request for an independent review of the Teesworks project, including the involvement of the NAO. As someone whose primary responsibility as mayor of the Tees Valley is to attract investment and create jobs.” I felt that recent misinformation and Andy McDonald’s abuse of Parliamentary privileges among local people was starting to weigh on the prospects of Teesside and the local community.
“I believe an independent review is needed to show investors, businesses and the local community that what has become, and continues to be, an incredible project for jobs and investment in our region, there is none corruption, no wrongdoing or illegality.”
“I look forward to the outcome in due course and will not comment further until the independent review is complete to allow the independent panel to carry out its work without influence or favour. My officials stand ready to provide any information requested as part of the independent review.”
Concerns about Teesworks were raised after a share transfer resulted in companies owned by Mr Corney and Mr Musgrave – JC Musgrave Capital, Northern Land Management Ltd and DCS Industrial Limited – increasing their stake in Teesworks Ltd from 50% to 90%, it said that STDC owned only 10% and not as before at 50%.
At the time, Stockton North MP Alex Cunningham said there was “shady business” in the area, but Mr Houchen said the deal had relieved the taxpayer of liability for the site and allowed the freeport to invest hundreds of millions of pounds in private secure cash.
An estimate seen by The Northern Echo puts the cost of rehabilitating the site, excluding the 90 hectare SeAH site, at £482.6m and the whole site has been given a face value of £1.
Read more: Baroness Chapman calls for House of Lords review of Teesworks deals
The original goal was to create 20,000 jobs at Teesworks over a period of 25 years. Public funds were used to rehabilitate some parts of the site and the investors’ money was then reinvested in the remediation of the next plot.
However, Mr Houchen has previously said that redevelopment work would need to be accelerated so investors could benefit from time-limited free port tax breaks, which will be reviewed in 2026. This is the argument for moving to a 90/10 stock split private investment could be brought in faster.
Currently, Teesworks Ltd is eligible to purchase land on the site at £1 per acre. STDC borrows money to rehabilitate land and Teesworks Ltd then pays it back with interest. Unless it repays the STDC, it cannot acquire the land.
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Teesworks Ltd is also entitled to half of the scrap revenue from the site. According to the latest figures, the amount of scrap totaled 93 million pounds.
Mr Corney and Mr Musgrave did not participate at all in a public tender process to acquire a stake in Teesworks (or when the stake was increased to 90%), but Mr Houchen said the deal would not have happened without the developers.
Leveling Up Minister and Bishop Auckland MP Dehenna Davison said the Government had seen “no evidence of corruption, wrongdoing or illegality”.
Conservative MP Simon Clarke of Middlesbrough South and East Cleveland previously said Mr McDonald made a “shameful attempt” to “slander” the free port scheme. Mr McDonald said the Tories were “utterly ridiculous” to blame Labor and had to accept that there were “very serious and legitimate concerns”.
Speaking of today’s announcement, he said: “There has been a shameful campaign by MP Andy McDonald and the Labor Party to vilify Teesworks – the biggest regeneration project in the country and the best thing that has happened to Teesside in a generation.” behaving abominably and hiding behind parliamentary privilege to make allegations which he does not wish to make public where he could be sued.
“Their continued attempts to spread dirt risk deterring investment and jobs. It is vital that we get clarity, and I am delighted that the government has listened to Ben Houchen’s call for this independent investigation.
“I look forward to the independent investigation, supported by the National Audit Office, providing its assessment – hopefully as soon as possible.”
“The truth will come out and everyone who tried to discredit a project that will create tens of thousands of good jobs for Teesside will have to answer for their cynical campaign of destruction.”
An NAO spokesman said: “The NAO does not have the legal authority to conduct audits of individual local authorities and affiliated bodies.”
“The NAO can agree to carry out such work at the request of a minister. This would require agreement between the Minister and the relevant auditees under Section 6(3)(d) of the National Audit Act 1983.
“In discussions with government officials last week, the NAO said it was willing and able to conduct an audit of South Tees Development Corporation and the Teesside Steelworks redevelopment, subject to the necessary agreement being reached.
“The Government has decided to take alternative arrangements to consider these matters, as is its prerogative.”
https://www.thenorthernecho.co.uk/news/23544275.michael-gove-confirms-teesworks-investigation-launched/?ref=rss Michael Gove confirms that Teesworks’ investigation will be launched