Teesworks: inspectors to probe Ben Houchen's Tees Valley over 'ongoing concerns' by Government

They will assess whether TVCA is complying with its duties, following the Best Value Notice issued by Labour last year.

This was designed to push for continuous governance and finance improvements over a National Audit Office investigation, which campaigners had been calling for into the Teesworks freeport.

At the time, Housing Secretary Angela Rayner told The Yorkshire Post this was the “quickest and most robust way” to deliver for people on Teesside.

Today, the Government announced that inspectors will assess the combined authority, a step up in scrutiny from the original Best Value Notice.

It said this was due to “risks arising from the authority’s high levels of debt, leadership and governance arrangements” and “signs of potential Best Value failure”.

A TVCA spokesperson said: “We have always been clear that we welcome scrutiny and constructive challenge.

“There is more work to do, and we will continue to make improvements wherever they are needed.”

In a written statement to Parliament, Local Government Minister Jim McMahon said: “The government is committed to a radical shift in where power and resources lie, empowering local leaders to drive growth and improve outcomes for their communities.

“But stronger local leadership must be matched by strong local institutions.

“As powers and investment increase, so too does the responsibility to demonstrate strong governance, sound financial management, transparent-decision making and effective stewardship of public resources.”

Laura Shoaf, the former chief executive of the West Midlands Combined Authority, will be the lead inspector, with three assistants set to be appointed. They will report back to ministers by March 2027.

It is the latest controversy around TVCA and the Teesworks project.

The freeport, which covers the former Redcar steelworks site, was initially a 50-50 joint venture between public body South Tees Development Corporation (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 Ben 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.

The tax incentives at Teesworks have seen more than £1bn of inward investment, including the Net Zero Teesside carbon capture project.

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

Despite senior Labour figures promising before the election to get the NAO to investigate, in April last year they settled on the Best Value Notice.

More recently, accountants EY could not sign off TVCA’s 2024-25 accounts, saying it uncovered “material misstatements” and “material inconsistencies”.

This has led to the combined authority missing the statutory deadline for its accounts to be audited for two years in a row.

The TVCA spokesperson added: “We welcome the appointment of Laura Shoaf and her fellow inspectors and will work openly and constructively with them and we’re pleased the Government are committing the appropriate resource and people to bring this process to a conclusion.

“This is an opportunity to demonstrate the progress that has been made, while continuing to strengthen the organisation and ensure it delivers effectively for people and businesses across the Tees Valley.”

The region’s six Labour MPs said in a combined statement: “Strong local governance at TVCA is essential to sustaining this progress and building a stronger future for our region.

“Ben Houchen should welcome this scrutiny. Every politician should be prepared to answer for decisions made on their watch. It is your money. You deserve answers.”