Two Tees Valley development corporations to be axed by Mayor Ben Houchen

The bodies, tasked with town centre regeneration in Middlesbrough and Hartlepool, are to be replaced by a mixture of public sector leads – TVCA, local councils or another public body – and joint ventures with the private sector.

The decision will be made at next week’s Cabinet meeting, taking place on Friday, November 13.

Back in 2022 TVCA Cabinet approved the establishment of two mayoral development corporations, in an attempt to accelerate town centre regeneration in Hartlepool and Middlesbrough.

In March this year, Mayor Houchen announced that a formal review would be taking place, to determine whether the development corporations would stay or face the chop, after alifespan of just three years.

The two development corporations are to remain in operation in the short-term, with a transition plan to see them dissolved within a year, subject to government guidance on their closure.

Middlesbrough’s development corporation came into effect when Independent Mayor Andy Preston was in charge. Current Labour Mayor Chris Cooke is happy to see the back of the development corporation in his town centre, believing that it has achieved “very little”.

Other options that were considered, but not selected, include a business as usual option, where the development corporations continue as they are, or a private sector lead option, whereby the assets held by the development corporations would be sold off.

Teesside’s other development corporation, set up in 2017, is the South Tees Development Corporation, which encompasses a 4,500 acre site, south of the River Tees. Unlike the urban town centre bodies, this industrial site is unaffected by the ongoing changes.

What Mayor Houchen said

Speaking to the Local Democracy Reporting Service (LDRS), Mayor Houchen said there are still details to be worked out, as government rules are not entirely clear on the process of closing a development corporation.

He said the “biggest driver” of his decision is the government “finally” pulling the trigger on some of the new fiscal devolution powers, which are “stronger” than what he thought they would be a year ago.

For the most part, these will come into force in 2028, with the exception of the business rates, which will come in – phased – from 2027.

Additionally, stronger mayoral planning powers, that Mayor Houchen cited as a reason for potential closure of the development corporations back in March, look set to be given to regional mayors across the country in the first half of 2027, which will be more powerful than the planning powers that currently sit with development corporations.

These include mayoral development orders, which would enable mayors to grant upfront planning permission for specified types of development in defined areas.

He said that the combined authority is working “very well” with both Hartlepool and Middlesbrough on the transition, adding that he hopes to continue to “deliver the vision”, but in a more “efficient” manner, compared to utilising a “middle man” development corporation.

Other regions are either keeping their development corporations or making new ones, while Teesside is going in the opposite direction.

Mayor Houchen put this down to some of other combined authorities having “huge political problems with their Cabinet and they are trying to bypass their Cabinets, because a mayoral development corporation is answerable to a mayor”, with a mayor appointing the board, and setting the strategic priorities.

He discussed how mayors no longer need the permission of local authorities to set up development corporations and said there would be an argument for keeping them, if, for example, he was constantly fighting with Mayor Cooke, “but the fact there is alignment on growth plans, on vision, on what Middlesbrough town centre should become, and the relationships, both personal and professional”, means Middlesbrough Development Corporation is not needed.

He added: “Unless [the government] beef up the powers in development corporations, to keep them ahead, there’s much less of a reason to have development corporations, particularly where you’ve got mayors.”

It had been hoped that a decision on the future of the development corporationswould come in July, which was then pushed back to the end ofSeptember, which was also missed.

Mayor Houchen explained that there has been a “continuing emergence” on what powers the government is going to devolve, highlighting how consultation on planning powers only closed this October, as well as the need for a “proper process and procedure” for the disposal of assets and liabilities that sit within the development corporations.

While from a “technical” point of view, Mayor Houchen says the development corporations will be wound up within 12 months, on a practical level, he thinks they will be gone “potentially by the end of the financial year”.

He confirmed that there would be no more money from TVCA going to the development corporations, even if there are assets and liabilities to manage as part of a transition beyond the end of next March and that the development corporations would be able to “stand on [their] own two feet”.

Mayor Houchen added: “We’ve spent the last three years arguing about whether to have a development corporation or not, rather than focussing on the outcomes, which is can we build something?” He said that agitation, politics and the review has caused a slow down, meaning “Middlesbrough has not achieved what it should have achieved”, clarifying that he wasn’t laying this at the foot of the council.

The view from Middlesbrough

Also speaking with the LDRS, Mayor Cooke described the closure of the development corporations as “the right thing to do, it’s a costly exercise to keep them running, they’ve been paying over £1m a year for planning”, adding: “The MDC hasn’t been meeting effectively or really doing anything of progress.”

He said the soon-to-be launched investment prospectus would “overtake” most of the development corporation actions.

Mayor Cooke, who as a councillor in February 2023, voted against the creation of the Middlesbrough Development Corporation, didn’t mince his words when asked what he thought had been the biggest achievement of the regeneration body. “I don’t think there has been one, I think that it’s achieved very little.”

As for the establishment of the corporation, he said he could see the justification for trying to “streamline” development in the town centre at a time when the council was “possibly more turbulent”.

He said with how the council is currently operating, along with its interactions with the combined authority, it “lends itself to a different operating model”.

Mayor Cooke discussed how there has been a lack of “anchor” institutions engaging with the town’s development corporation, pointing instead to the Place Leaders Partnership in Middlesbrough as a driver for the new model for the town centre, highlighting membership including Cleveland Police, Teesside University, Middlesbrough College, local businesses and “key people” from the community voluntary sector, and Middlesbrough FC.

The view from Hartlepool

Hartlepool Council was contacted for comment. Reform council leader Councillor Dave Bruce said: “The council supported the creation of the Tees Valley mayor’s development corporation in order to help drive economic growth, investment and regeneration into Hartlepool alongside the work that the council itself is doing.

“This work is ever more important given the opportunities it presents for local residents and businesses and for supporting the council and the borough financially. I am keen to champion the town’s development offer locally, regionally and nationally, and look forward to working with the Tees Valley mayor and the combined authority towards these goals.”