A special, short notice, mid-week edition of The Teesside Lead for you as the news breaks of government intervention in the long-running Teesworks saga.
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The government is expected to launch a statutory investigation into the financial affairs of Ben Houchen’s Tees Valley Combined Authority (TVCA), in a move that could undermine Andy Burnham’s flagship devolution plans.
The FT reports that secretary of state Angela Rayner is set to announce the probe on Thursday, following years of questions about the financial governance of TVCA, the Teesworks regeneration scheme, and Teesside International Airport.
It’s an escalation of statutory powers after the combined authority was issued with a best value notice in April 2025. A governance improvement board appointed since then says significant improvements had been made, but in the time since they were appointed it emerged that £500m in loans to the South Tees Development Corporation (STDC) - which is responsible for the Teesworks project - were not made with any written agreements in place, and that STDC is now struggling to repay those loans.
More than £128m has also been borrowed by Teesside International Airport, most of which was also borrowed without formal agreements or paperwork. Around £28m in interest payments on those loans are not expected to be repaid to the public purse, while questions remain about the possibility of the loan amounts being repaid, too.
TVCA’s auditors, EY, said last year that TVCA would be exposed to “significant potential losses if the airport remains unprofitable and unable to repay these lendings”.
In December last year, EY identified “material misstatements” in TVCA’s accounts for 2024-25, which they said were evident simply from reading the document.
Jo Moore was appointed TVCA’s chief financial officer in order to sort out the mess in July 2025, but left in August this year - two months before her contract was due to end.
The government’s move to investigate TVCA further comes after an independent review of governance published in 2024 found no evidence of criminality, but highlighted serious concerns that governance of Teesworks did not “meet the standards expected when managing public funds.”
Later in 2024, the Labour Party announced it would send the National Audit Office to investigate TVCA if it won that year’s general election, but failed to do so when they took office. Last year’s best value notice, and the refusal to provide Ben Houchen with the same devolved powers given to other regional mayors were the only signs Labour had any interest in the issue.
The last year TVCA’s accounts were full audited is 2022-23, although they were “disclaimed” by the auditors, meaning they didn’t obtain sufficient evidence to provide a formal opinion on the accounts.
It has since transpired that huge mistakes in that year’s accounts relating to the lease of the SeAH Wind site at Teesworks meant a miscalculation of £55m in usable reserves (i.e. they have £55m less cash than they thought they did). This mistake, and possibly others, have had an impact on all balance sheets since then, and TVCA is working to correct them.
The FT reports that an independent inspector will be launching an inquiry in the next two weeks, with their findings reported back to Angela Rayner.
In response, TVCA said: “We welcome the appointment of Laura Shoaf CBE and her fellow inspectors and will work openly and constructively with them, and we’re pleased the government is committing the appropriate resource and people to bring this process to a conclusion.”
It added: “We have always been clear that we welcome scrutiny and constructive challenge. There is more work to do, and we will continue to make improvements wherever they are needed.”
Laura Shoaf is a former chief executive of West Midlands Combined Authority.
If it does not smell right, it generally is not right. I hope the full force of the law is applied.
Finally! A few people have trousered an awful lot of money on the back of this - too late to get any of it back, I'm sure, but light needs to be shone upon it, and names named (all domiciled offshore, no doubt)