Teesworks: Labour refuses to commit to National Audit Office investigation despite pre-election promises

Teesworks, which covers the former Redcar steelworks site, 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, which was supported by Mayor Lord Ben Houchen.

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

Ms Rayner was one of many Labour figures to criticise the previous Conservative government for not calling in the NAO, while Rachel Reeves told The Yorkshire Post that she would bring in the watchdog to probe the deal.

Since getting into power in July, both the Deputy Prime Minister and Chancellor have been conspicuous in their lack of support for an NAO investigation into Teesworks.

Ms Rayner, the Local Government Secretary, is currently scrutinising Lord Houchen’s 800-page response to a government review, which found “no evidence of illegality” but made 28 recommendations for improvements in governance and transparency.

When asked about a potential NAO probe, she told the BBC: “I think Ben [Houchen] has been very clear that he’s open to transparency … I intend to respond to Ben.

“I think transparency is important for people. People have raised questions and they have to have confidence in the system.”

When pushed further, Ms Rayner added: “I will engage with Ben in the proper means to make sure we deliver what we said we would for the people of Teesside, and that’s transparency so they have confidence in the system.”

Yesterday, Mr McFadden also declined to commit to an investigation, but left it open as a possibility.

He said that if the Government has more to say on the transparency around Teesworks “we'll do it after that process [with the review] has been completed”.

Despite the review, Lord Houchen said that he would not choose to do anything differently with the Teesworks deal.

The Tees Valley Mayor told the BBC: “It was all about the politics of the mayoral election which was the prelude to the general election.

“The most important thing to me is the public and I was elected with the third-highest share of the vote of any mayor in the country and I think that is a judgement on the success of that programme.

“If you’ve said to me you can spend £500m of public money, secure 10,000 jobs and £7bn of private investment, that’s a great investment every single day of the week.”

Lord Houchen claimed that Ms Rayner and Prime Minister Sir Keir Starmer were coming to him to ask: “How have you moved so quickly? How have you created those jobs?”

“At the minute they are trying to learn lessons from us in what we’ve done on that site in terms of how we built the energy infrastructure,” he added.