Teesworks inquiry: 'No evidence of corruption' at site

An inquiry has found no evidence to support claims of corruption or illegality at the Teesworks development, but criticises its governance and transparency.

The regeneration project on Teesside's former steelworks, which has the potential to bring billions to the region, has been under scrutiny after allegations of mismanagement.

A report, which was commissioned by Levelling Up secretary Michael Gove last summer, found there was no evidence to support allegations of corruption or illegality at the site.

However, the report did make 28 recommendations, some of them around transparency and governance.

It also said the project needed to do more to make sure taxpayers can see that the investment is generating value for money.

The 97-page report by an independent panel, published on Monday, stated: “Based on the information shared with the panel, we have found no evidence to support allegations of corruption or illegality.

“However, there are issues of governance and transparency that need to be addressed and a number of decisions taken by the bodies involved do not meet the standards expected when managing public funds.

“The panel have therefore concluded that the systems of governance and finance in place within TVCA (the Tees Valley Combined Authority) and STDC (the South Tees Development Corporation) at present do not include the expected sufficiency of transparency and oversight across the system to evidence value for money.”

Responding, Lord Houchen said: "The people of Teesside, Darlington and Hartlepool can welcome this investigation, which sets out in black and white that there is no corruption or illegality at Teesworks.

“The investigation was thorough, wide-ranging, and detailed. It assessed more than 1,400 documents, tens of thousands of pages of material and conducted 45 interviews, and I’d like to thank the panel for their hard work and diligence.

“I welcome the recommendations of the panel, and my team and I are already working to review the recommendations to improve our processes and procedures in line with the report’s findings.

“It explicitly recognises that the Teesworks Joint Venture was ‘critical’ in reaching an agreement with the Thai banks and resolving the CPO, and that without them the progress we have seen would not have been possible.

“Without this partnership, the former steelworks would still be sat idle, costing the taxpayer £20m a year to stand still, with no investment and not a single job in sight.”

He added: "It also dispels the myth that we sold the land for just £1, with the panel confirming the deal was actually worth £39m to the taxpayer."

The inquiry found the lack of transparency surrounding the venture between the South Tees Development Corporation and the companies run by two local developers has a “corrosive effect on public trust”.

It added a "high level" of confidentiality around the transfer of ownership to a 90-10 division of shares in favour of the private sector partners in late 2021 “may be seen as an omission which has exacerbated the extent of public scepticism about the value for money of the project”.

Responding in the House of Commons to the report, Labour shadow communities minister Justin Madders said: “(The report) is damning. The issue has always been one of value for money, and on that, the report shows that taxpayers’ money was not being spent in the way the public should expect.”

After quoting from the report, he said: “These are not minor trifling concerns. They reveal a systemic and flawed decision-making process that hinders transparency and fails to show value for money.

“This scandal has exposed gaps in accountability and serious questions remain about the lack of local democratic scrutiny throughout this process.

“It is now clearer than ever that this needs to be investigated by the National Audit Office. It was an astonishing decision in the first place for the Government to ignore the calls for a fully independent investigation into the serious allegations that have arisen, not just from the benches behind me.”

Middlesbrough MP Andy McDonald, who raised concerns about the project in Parliament, said: "What's clear is there are massive concerns around governance and finance and oversight, scrutiny, value for money. All of these things I have said over the years."

Describing the system as "completely flawed", he added: "We need that National Audit Office inquiry that my colleague has just called for in Parliament."

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