Questions remain over private funding deal for Teesworks freeport site

Among the figures shown on the website, there are claims that 2,725 long-term jobs have been created, and that £168m has been “committed” by Teesworks’ private partners.

When asked about the claim that 2,725 jobs had been created, a spokesperson for Tees Valley Combined Authority (TVCA) - the local authority led by Tory mayor Ben Houchen - said that only 1,250 of those jobs were “direct jobs”. They claimed that SeAH wind, whose wind turbine monopile factory has not yet been completed, would employ 750 people when operational, while 500 people would be employed by Net Zero Teesside (NZT); a gas power station and carbon capture utility.

The spokesperson confirmed that remediation work for the site that will be occupied by NZT, where they are clearing 150 acres of the most polluted land on the site adjacent to the former Redcar blast furnace, only started “a couple of weeks ago.”

Asked if these jobs had been filled yet, the spokesperson said that “the recruitment of these roles is the responsibility of the private sector companies and as such we don’t hold this information.”

The figure of £168m private investment is one that has only in recent weeks become apparent in the conversation - with Mr Houchen using it in interviews and on social media. However, when they were asked when this investment had been secured, TVCA originally avoided the question, saying: “this has been secured through contractual arrangements with our private sector partners.”

When chased repeatedly with no response, TVCA eventually replied that the amount had been secured as part of the original agreement in 2020 that saw the start of the joint venture between South Tees Development Corporation (STDC; the public body run by Ben Houchen to oversee redevelopment of the old steelworks) and their private partners who are headed by local businessmen Chris Musgrave and Martin Corney.

All available public sector funding has now been allocated to the project, and the £168m - which has not yet been paid - is expected to come from the private sector to continue the project. However, £113.8m of this money, according to TVCA, will be used to clear the local authority’s loan debt to the central government’s UK Infrastructure Bank.

The successful application for this loan was initially announced by TVCA in October 2021, a month before STDC transferred most of its shares in Teesworks Ltd to Messrs Musgrave and Corney.

While the public sector funding has apparently run out, the progress tracking website displays a ticking counter at the bottom of the page indicating the amount of money the project would have cost the UK taxpayer had TVCA not done anything. At the time of writing, that figure was £229.8m, significantly lower than the claimed current cost to the taxpayer of £246m.

Representatives of Teesworks Ltd confirmed that private funding for the project came as part of the agreement in November 2021 that saw private interests acquire 90% of the company, adding that, “a number of other contractual commitments by Teesworks Ltd” would be published in due course.