Ben Houchen on Teesworks: "We got things wrong"

“We have got things wrong, we can always be better. We will adopt the recommendations and we will continue to deliver for the people of Teesside.”

He was being questioned the day after Levelling Up Secretary Michael Gove wrote to the Conservative asking how he intends to implement the recommendations of the Government investigation into the governance of his combined authority and the Teesworks project.

Mr Gove commissioned a review into Tees Valley Combined Authority’s (TVCA) oversight of the South Tees Development Corporation (STDC) and Teesworks Joint Venture in May 2023 following accusations of corruption. The report published this week found no evidence of illegality but was excoriating in its criticisms of TVCA’s governance.

The 96-page report was authored by a panel chaired by Lancashire Council chief executive Angie Ridgwell, along with Quentin Baker, director of law and governance at Hertfordshire Council, and Richard Paver, former treasurer at Greater Manchester Combined Authority.

Among the report’s conclusions were that decisions being made at TVCA and STDC "do not meet standards expected when managing public funds". Its authors provided 28 recommendations to be implemented to improve governance and transparency, concluding “the systems of governance and finance in place within TVCA and STDC at present do not include the expected sufficiency of transparency and oversight across the system to evidence value for money.”

Concurrently with the report’s publication, the Department for Levelling Up, Housing and Communities (DLUHC) published the letter from Mr Gove to Lord Houchen, in which the Secretary of State asked him to “engage with the panel’s recommendations, working with the Combined Authority and partners as appropriate, and provide me with an initial report by 8 March on how you intend to respond to the Panel’s recommendations.”

The report notes that public sector investment in the regeneration project on the site of the former Redcar steelworks is due to reach “in excess of £560m” by the end of 2024/25, while the private sector joint venture partners in Teesworks “have put no direct cash into the project and have received nearly £45m in dividends and payments, and hold £63m of cash”.

Despite Lord Houchen claiming the joint venture partners had taken on liabilities at the Teesworks site in exchange for 90 percent ownership of the previously 50-50 Teesworks Ltd, the report is clear in its assessment of the current agreement, which “allows the JV partners to choose which plots they develop and when, leaves a plausible scenario whereby STDC is left with stranded liabilities in addition to a number of ongoing site liabilities and debt servicing costs.”

One of the recommendations made by the report was to review membership of TVCA’s board, including chief executive Julie Gilhespie, “to ensure relevant expertise and knowledge is in place to support the Mayor”.

A spokesperson for TVCA told The Yorkshire Post it was “categorically untrue” that Ms Gilhespie would be resigning as a result of the report’s findings.