Unpacking whether the NAO will be mobilised to investigate Teesworks
PLUS: The first tenants for the Airport Southside Business Park
Just when I thought I’d made it through Christmas without being struck down by all the bugs that seemed to be flying around, I popped to my GP in the middle of writing this newsletter to be told that, yes, I do have tonsillitis. Fingers crossed you’ve fared better!
Have you made any new year’s resolutions? It’s that really difficult part of the year where you try to get back into old habits after the Christmas break, as well as maybe trying to form new ones as part of your resolutions.
The time for reflection may have passed, but what better time to look ahead at what’s on the cards for politics in the Tees Valley region? And that’s what I’ll be doing in this 21st edition of The Teesside Lead.
The big question on the lips of those following the Teesworks saga is whether or not the government will send the National Audit Office (NAO) to investigate. I look at why that hasn’t happened, and if it ever will, as well as taking a look at what’s happening with Teesside Airport.
There’s nobody else in Teesside doing this sort of journalism. So if it’s something you value, please consider supporting The Teesside Lead.
A £4.99 monthly sub works out at only 62p per edition, while an annual sub of £49 means you basically get two months for free.
Thanks to all of you who have been long-standing supporters, as well as to the huge number who’ve taken the financial plunge since Christmas!
If you can’t afford a paid subscription, adding your email address to the mailing list gives me more power and ensures you’re kept up to date with everything Teesworks, TVCA and Teesside. It’s also free (and incredibly valuable to me) to share The Teesside Lead on social media, so please help support independent journalism in any way that you can.
With changes happening to social media algorithms and moderation policies all the time, word of mouth has never been so important.
It was last April when I was stood in a hard hat and hi-vis at Teesport in front of Sir Keir Starmer if Labour would commit to using the NAO to conduct an investigation into Teesworks. He deferred to Rachel Reeves, stood next to him, who told me, “I know that if I become Chancellor of the Exchequer later this year there isn’t going to be much money to go around, and that’s why it’s even more important that every pound of taxpayers’ money that’s spent is spent wisely.
“When it’s not and when there is money that isn’t being spent wisely, we need to uncover that, and that’s why I think it is right that the National Audit Office is brought in to investigate this, and that’s what we would do.”
Since then, there’s been very little in the way of mobilising the NAO. So, what’s going on?
When allegations of corruption were thrown the way of Teesworks after details of the change from 50-50 to 90-10 ownership emerged, Labour led calls for the NAO to be called in, followed by Tees Valley’s Conservative mayor Ben Houchen.
“You may now have read a letter from Lisa Nandy MP, the Shadow Secretary for Levelling Up, Housing and Communities, calling for a comprehensive, independent investigation into Teesworks,” wrote Lord Houchen to the NAO’s Comptroller and Auditor General, in May 2023.
“I would like to wholeheartedly add my support for such a review,” he added.
In the event then-secretary of state, Michael Gove, announced the independent panel which would conduct the Tees Valley Review - the closest thing we have to a sacred text when it comes to the shifting sands of Teesworks.
The Tees Valley Review, published in January 2024, outlined its concerns about governance and management of public money at Teesworks, but it also laid out its own limitations, leaving the door open to further investigation.
“The Panel were overwhelmed with documents presented in an unstructured way and lacking a cohesive narrative,” it said. “Subsequently, responses were limited to the specifics of the question posed. This has caused drift and delay in the process and reduced our confidence that we have been given access to all relevant materials.”
More significantly, it wrote: “In the time available to the Panel, we have not been able to pursue all lines of evidence or examine all transactions.”
It was three months later, during the mayoral election campaign, when Rachel Reeves told me they would send the NAO in if Labour were elected to government in July. And since then, nothing. At least nothing in public.
From what I understand, it’s more a case of the government dragging its heels rather than sitting on its hands, with many close to the issue frustrated at the lack of progress.
The general feeling for the last six months between sources close to government and various others I’d spoken to was that it was a nailed on certainty that Tees Valley Combined Authority would be served with a Best Value Notice.
The Local Government Act 1999 puts a statutory duty on local authorities to achieve best value for money. A BVN is basically a warning from central government to an authority that it needs to work on improving things.
The government can issue a BVN if it receives any evidence of failure. According to the Local Government Information Unit, this can include “audit reports, complaints, public plans, data submissions to the central government, peer reviews, and sector inspections.”
Given the Tees Valley Review reported “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,” it seems as though the Government could issue a BVN to TVCA immediately.
In fact, one doesn’t have to go very far for a case study in BVNs.
Middlesbrough Council was issued with one in January 2023 because of “Serious concerns highlighted by the external auditor around governance arrangements,” as well as “Cultural and governance issues” found in a CIPFA review.
This shouldn’t really be some astonishing prediction that TVCA will be issued with a BVN in 2025, the real question is why it hasn’t happened sooner.
However, as I was writing this story, Jen Williams of the FT published her own piece saying the government will go one step further, and that secretary of state Angela Rayner was advised before Christmas to send the NAO in to investigate Teesworks.
The only statutory obstacle to overcome is that the NAO can only investigate a body outside of central government if that body gives it consent.
While Lord Houchen invited the NAO to come and look at the books a couple of years ago, he’s since said any further investigation would be a waste of time and resources.
The only certainty for 2025 is that of more political arguments on Teesside.
Teesside stories you may have missed…
🛋️ Profits at Teesside-based furniture company Barker & Stonehouse have fallen
Yesterday, Lord Houchen proudly announced the first tenants for the Airport Southside Business Park.
ABL 1 Touch, a nationwide company which repairs damaged vehicles, will create 25 jobs after taking a lease at the first - and so far, only - warehouse on the potentially huge business park.
The 25,000sq ft warehouse was built as the first phase of the business park, a 50-50 joint venture with Chris Musgrave and Martin Corney which pre-dates their Teesworks association.
As mentioned previously in The Teesside Lead, this single warehouse, the mile-long road to get to it and associated infrastructure were built using a £23m loan from TVCA.
A similar-sized warehouse in nearby Thornaby is currently available to lease for £255,000 a year. If ABL is paying a similar rate, the public sector can expect to have its £23m repaid in 180 years given half the lease will go to the private partners.
All future tenants at the business park will have to pay to build their own buildings on the site, and it’s likely they’d have to pay a cash sum up front for the privilege. I recently heard of plans for a potential new tenant at the site which would occupy an enormous footprint. Could it be that the cash from selling this land could be used to clear the airport’s debt?
On that subject, if you’ve heard anything about it, do get in touch!
The Tees Valley Review had a very specific remit, which it mentioned in its findings. One of those areas outside the scope of its enquiries was that of Teesside Airport. Would an NAO investigation include this in its remit?
Considering the amount of debt owed to TVCA, one would assume the nature of the airport and its opaque ownership structure would come under some sort of scrutiny.
Hopefully I’ll be back to full strength by Sunday’s edition.
In the mean time, get in touch at teesside@thelead.uk or via social media: Bluesky or X-formerly-known-as-Twitter.
Thanks for reading!
Leigh