A new inquiry into the Teesworks site has been ordered by the government – but concerns are being raised about the powers the probe will have.
Leveling Up Secretary Michael Gove has written to the Conservative mayor of the Tees Valley, Ben Houchen, to say that he will “appoint a panel, in line with established practice, to undertake an independent, external assurance review”.
This comes following allegations of “corruption” – including from Labor MPs – at the site of the former Redcar Steelworks, which is being redeveloped into an industrial site and a freeport with thousands of jobs in the pipeline.
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It had been expected that a statutory National Audit Office (NAO) inquiry would be instructed under statue to investigate, but this has not materialized.
Mr Houchen, shadow leveling up secretary Lisa Nandy, leveling up committee chair Clive Betts and Labor MP Andy McDonald had all called for an NAO probe.
A spokesman for the NAO said: “In discussions with government officials last week, the NAO indicated that it was willing and able to carry out an examination of the South Tees Development Corporation and the redevelopment of Teesside Steelworks, if the necessary agreement was in place .
“The government has decided to make alternative arrangements for looking into these matters, as is its prerogative.”
In his letter, Mr Gove said: “I have considered calls for such an investigation to be led by the NAO.
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“It is not, however, the NAO’s role to audit or examine individual local government bodies and its powers would not normally be used for that purpose.
“I do not think it would be appropriate to expand so significantly the role of the NAO by asking them to lead this inquiry. Nonetheless, I would welcome the NAO updating its review of government’s funding arrangements for STDC.”
Writing to the NAO, Sarah Healey, the most senior civil servant in the Department for Leveling Up, Housing and Local Communities, said the decision was made “not because the department considers that there is evidence to recommend such a review, but to answer the mayor’s understandable request”
Mr Houchen said: “I welcome the government agreeing to my request for an independent review into the Teesworks project, including the involvement of the NAO.”
He added: “I feel that an independent review is necessary to show investors, businesses and local people that there is no corruption, wrongdoing or illegality in what has become and continues to be an incredible project for jobs and investment in our region.”
Mr Gove says he would “welcome the NAO updating its review of government’s funding arrangements for STDC”.
Without an order from Mr Gove, the NAO will rather look into the central government funding reportedly continuing into the next financial year.
The South Tees Development Company was set up to run the development of the site after the steel plant shut down in 2015, and it is now 90% privately owned.
In his letter, Mr Gove outlined how he made the decision to appoint a panel as the soon-to-be-created Office for Local Government (Oflog) has not yet materialized.
Concerns have been raised around claimed links between the companies which now own the Teesworks project, with claims made that their owners are benefiting at the cost of the taxpayer. This has not been proven.
Mr McDonald, the Labor MP for Middlesbrough said the announcement – which does not include an NAO inquiry – “falls way short” of what is needed.
In response, the Conservative MP for Middlesbrough South and East Cleveland Simon Clarke said: “I warmly welcome the independent inquiry launched by the Government into Teesworks.
“The truth will come out and all those who have attempted to discredit a project that will deliver tens of thousands of good jobs for Teesside will have to answer for their cynical campaign.”