Labour councillors criticise Government plans to transfer council assets to Ben Houchen development corporation

Councillors in Middlesbrough have criticised the Government’s decision to transfer council assets to a development corporation in the town which they describe as being a “smash and grab” of public assets.

Levelling Up secretary Michael Gove this week approved the transfer of assets from Labour-run Middlesbrough Council to the Middlesbrough Development Corporation (MDC), which is chaired by Conservative combined authority mayor Ben Houchen.

Assets to be transferred as part of the MDC’s masterplan for regenerating the town centre include Middlesbrough bus station, the Middlehaven area, the Civic Centre and the dilapidated Crown Pub which was bought by the council last year at more than 60 per cent above estimated market value.

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The Government also gave permission for assets to be transferred from Hartlepool Council to the town’s own development corporation, also chaired by Lord Houchen, including the civic centre and the magistrates’ court which has been unused since 2017.

Middlesbrough Town Hall.Middlesbrough Town Hall.
Middlesbrough Town Hall.

Referring to a damning government report into governance and transparency at Tees Valley Combined Authority (TVCA) which was published in January, a statement from Middlesbrough’s Labour councillors says: “We are appalled by the government’s decision to approve the transfer of millions worth of assets from Middlesbrough Council to the MDC after serious governance failings at the MDC’s parent organisation, the TVCA, were exposed in a damning report commissioned by the government itself.”

In February last year the council voted by a margin of 16 to 12 against the formation of the MDC, with all Labour councillors voting against the proposal. Despite this, the government went ahead and formed the development corporation a matter of days later.

At the time, Middlesbrough’s Labour MP Andy McDonald described it as a “serious denial of democracy.”

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“Many of MDC’s board are unelected and many have no relevant experience and yet this board will control a vast amount of taxpayers’ money and make key decisions for Middlesbrough’s future,” the councillors’ statement says.

“The governance at the MDC needs to be robust and transparent to match the weight of its responsibility. It is unacceptable that an unaccountable board can ‘smash and grab’ millions of public assets from the Council, not paying a penny.”

Middlesbrough Mayor Chris Cooke said: “Council tax payers in Middlesbrough will expect the Council to be properly compensated for any loss of income related to the assets. They will additionally not expect the council to begin to pay rent on buildings the council used to own at cost to the taxpayer.

“The Council has raised various concerns and to date we have received no assurances.

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“We need sensible plans for how the assets will be transferred, including assessing how current tenants and staff will be affected.

“We will work closely with TVCA and the government to make sure this happens in the right way for Middlesbrough.”

Lord Houchen said the move allowed the corporation to "get on with creating jobs, regenerating neglected areas and making Middlesbrough a town we can be proud of.

"I am pleased we can now move on with delivering the long overdue improvements that are so badly needed.”

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