Teesworks: Ben Houchen to use regional wealth fund to pay off development corporation loans

The Tees Valley Mayor said this would make the most of a projected rise in tax revenue from a series of multi-billion pound developments across the region.

This would also help manage the repayment of loans from the Tees Valley Combined Authority to the STDC to renovate Teesworks, the Tory added.

“This was always part of the plan,” he said.

“From day one, we always said that if we cleaned up the site, attracted investment and brought back good-quality jobs, it would create long-term benefits for local people.

"We are on the cusp of a once-in-a-generation opportunity to transform our region as these major developments come to fruition.”

The monetary arrangements and loans around Teesworks have been hugely controversial.

The freeport, which covers the former Redcar steelworks site, was initially a 50-50 joint venture between public body STDC and businessmen, Chris Musgrave and Martin Corney.

A transfer of shares in November 2021 saw the businessmen take control of 90 per cent of Teesworks Ltd, the company vehicle for the scheme, which was supported by Lord Houchen, who has been mayor since 2017.

More than £500m of taxpayers’ money has been spent, with Mr Musgrave and Mr Corney extracting at least £120m via dividends and other payments.

A Government review in January 2024 found “no evidence of illegality” but made 28 recommendations for improvements in governance and transparency with Teesworks and TVCA.

Lord Houchen indicated that the regional wealth fund could take on some of the powers currently held by the STDC.

“With significant investments on the horizon, it’s vital we start planning now to ensure that money is used in a way that delivers real, lasting benefits for people across Teesside, Darlington and Hartlepool,” he said.

“Creating a wealth fund would allow us to invest in our communities, support better public services, and make sure the success we are building at Teesworks and beyond is shared fairly across the region.”

Under existing agreements, it is projected that by 2030 close to £90m per year will be generated from the Teesworks site in business rates alone, TVCA said.

This will be produced by major projects such as Net Zero Teesside, one of the country’s two most advanced carbon capture, storage and utilisation schemes.

This income will be shared equally between the STDC and Redcar and Cleveland Borough Council, TVCA explained.

Lord Houchen added: “We’re now beginning to reap the rewards of our hard work to bring investment and jobs to Teesside, and this is the start of a really important process to decide how this money is best used to deliver for the whole of our region.

“This is just the beginning. As more investors move onto site and more jobs are created, even more money will come back into our local economy.

“Teesworks is proving that our plan is working. We’re bringing industry back, creating jobs, attracting global investment and making sure local people feel the benefits.”