Labour will send National Audit Office to investigate Teesworks if they win election

Teesport, operated by PD Ports, is the fifth largest port in the UK and is surrounded by Teesworks, the vast regeneration project at the former Redcar steelworks site which covers nearly 2,500 acres of land.

The regeneration project was initially a 50-50 joint venture between public body South Tees Development Corporation (STDC) and two local 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.

Asked by The Yorkshire Post if an incoming Labour government would empower the NAO to conduct an investigation, Ms Reeves said, “First of all can I commend the Yorkshire Post for the campaigning work you’ve been doing on this and uncovering some of the things that have been happening here.

“Michael Gove should have done what he was asked to do, which was to call in the National Audit Office.”

Calls for the NAO to investigate came from both the Labour Party and the Conservative mayor in charge of the project, Ben Houchen, following allegations of corruption in May last year.

The NAO is an independent Parliamentary body which assesses whether or not government departments are achieving value for money in their spending. Levelling Up secretary Michael Gove refused to give it the additional statutory powers it needed to investigate the Tees Valley Combined Authority (TVCA) and its subsidiary STDC, instead commissioning three local government experts to conduct a review into governance, finances and transparency at the project.

The panel concluded that systems in place at the public bodies “do not include the expected sufficiency of transparency and oversight across the system to evidence value for money,” and made 28 recommendations for improvements to be made.

It also revealed £540m of public money will have been spent on the project by the end of this financial year, while the two businessmen have made at least £120m with “no direct financial investment” from themselves.

“I know that if I become Chancellor of the Exchequer later this year there isn’t going to be much money to go around, and that’s why it’s even more important that every pound of taxpayers’ money that’s spent is spent wisely,” said Ms Reeves.

“When it’s not and when there is money that isn’t being spent wisely, we need to uncover that, and that’s why I think it is right that the National Audit Office is brought in to investigate this, and that’s what we would do,” she added.

A High Court judge ruled last month that STDC and Teesworks Ltd were liable to pay the majority of costs after a failed legal case they brought against PD Ports around access rights. STDC has already spent more than £3m on its own costs, leaving the taxpayer likely liable to pay more than £4m for the action.