Teesworks Programme: Audit

Lord Khan of Burnley Excerpts

Monday 29th July 2024 Lords Chamber

[Lord Scriven (LD)]

I beg leave to ask the Question standing in my name on the Order Paper, and so doing draw the House’s attention to my interest set out in the register as a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Khan of Burnley) (Lab)]

The previous Government asked the Tees Valley mayor to provide a progress update in September, following the recommendations of the independent review of Tees Valley Combined Authority’s oversight of the South Tees Development Corporation and Teesworks Joint Venture. Once we have received that update, we will consider whether the questions that need to be answered have been and whether any further action should be taken.

[Lord Scriven (LD)]

My Lords, many Teessiders’ jaws will drop on the floor when they hear that Answer from the Minister, as every Labour candidate in Teesside promised that a National Audit Office review would take place. In the light of half a billion pounds of taxpayers’ money being used and two businessmen making multimillion pound profits without taking any liabilities or any risk to their money, does that constitute best value? Why leave the people who have created the mess to solve the mess without any enforceable action being taken by Government?

[Lord Khan of Burnley (Lab)]

My Lords, I pay tribute to the work the noble Lord, Lord Scriven, does in local government, and I understand the deep emotions that he talks about, because there are outstanding questions to which the public deserve answers. We understand that this issue, like all local issues, is emotive. This is evidenced by it being raised in this House and in the other place several times. In fact, the noble Lord, Lord Scriven, has asked this question before. This Government believe that scrutiny and transparency are important. However, we must carefully consider the mayor’s response, due in September, and we will consider any further action to take when we receive it. We are not ruling out any options, and one option could be requesting the NAO to review.

[Baroness Armstrong of Hill Top (Lab)]

My Lords, as the Minister knows, this is an issue that the people of Teesside take very strongly. When I was working in the Tees Valley across a number of constituencies during the election, they really wanted transparency. They want to know what has happened to the money that the public, via the Government and other agencies, have put in and whether the arrangement, which gives 90% of the benefit to two individuals and only 10% to the public, can stand up. I appreciate that the Minister will bring the report, but will he also ask his department to look at an overall system of audit and accountability, because that disappeared when the Audit Commission disappeared, and there is no coherent across-the-board system for the devolved mayors. We want to give them more power, but if they get more power there must be transparency and proper accountability.

[Lord Khan of Burnley (Lab)]

I thank my noble friend for raising those important issues. It is true that the previous Government scrapped the Audit Commission and replaced it with a fragmented, locally led audit regime that is failing. This Government are committed to overhauling local audit and restoring better value for money for taxpayers. We are looking closely at all the evidence, and we will set out our plans, including legislation, shortly. I must remind the House that until we get the response of the Mayor of Tees Valley we cannot explore the options. We will wait for the response to the 26 recommendations which the mayor was asked to look at and then take further action.

[Lord Shipley (LD)]

My Lords, the Minister said that scrutiny is important and has committed the Government to undertaking further action when the mayor’s response has been received. What is the Minister’s expectation of the timescale? The mayor will respond quite soon, as I understand it, and the Government then have to say what they want to do. Can the Minister tell us how long that might be? Will he take into consideration the fact that the Tees Valley Combined Authority plans to have only five meetings of its cabinet in the period from September this year to the end of June 2025?

[Lord Khan of Burnley (Lab)]

I cannot comment on the meeting schedule of the Tees Valley Combined Authority. That is something for it to look at. In relation to the timeline, I have said to the House in previous answers that until six months have passed and the mayor has had an opportunity to address the concerns in relation to the 26 recommendations, we cannot work on this further. In the meantime, we recognise the point made by my noble friend that local audit needs transformative change, and noble Lords will very shortly hear the plans for changing the way local in which audit takes place.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, does the Minister share my mystification that none of the Conservative Members of this House are getting on their feet to make a comment?

[Lord Khan of Burnley (Lab)]

My Lords, I always enjoy my noble friend’s mystification. However, I cannot comment on this particular issue. Noble Lords are very welcome to ask any questions, and I am looking forward to them.

[Lord Young of Cookham (Con)]

My Lords, was there not an independent review into all these matters which found

“no evidence of corruption, wrongdoing or illegality”?

[Lord Khan of Burnley (Lab)]

That is absolutely the case. However, there are recommendations on decision-making, governance and scrutiny. I appreciate the noble Lord’s question.

[Lord Scriven (LD)]

My Lords, I appreciate that the Minister has said the Government have to wait for the mayor’s answers to the questions, which is different from what was being said before the Government were on the Government Benches. However, the review panel said in the report that the responses

“reduced our confidence that we have been given access to all relevant materials”.

The panel also said that it had

“not been able to pursue all lines of evidence or examine all transactions”.

Is that not why a full statutory audit is required: so that the Government convince themselves that Teessiders are getting value for money? With a response from the mayor, the report will have not seen all relevant information.

[Lord Khan of Burnley (Lab)]

The noble Lord again makes an important point. I remind the House that it is not the normal role of the NAO to examine or to audit local bodies. However, I understand that the NAO previously stated that it is willing to work outside its usual scope to undertake a review about Teesworks. We cannot prejudge the response of the Mayor of Tees Valley. When we get that response, we will look at it. In relation to the noble Lord’s question, that is another issue for the combined authority and the Mayor of Tees Valley to look at. Whatever happens, once that response is back with the Government, we will look at it and take further action then.