Teesworks Joint Venture

Lord Scriven Excerpts

Tuesday 30th January 2024 Lords Chamber

[Baroness Penn (Con)]

As I said in my original response, the Government welcome the recommendations on strengthening governance and transparency. We welcome the oversight that this review has provided in those terms. I think the noble Baroness might be referring to the fact that the government official is a member of the board of the development authority. When a government official is a member on a board, in examples such as this, their role is as an observer. In this case, however, the panel noted examples of questions being raised by that government member as part of that review.

[Lord Scriven (LD)]

My Lords, I would like to directly quote from the report because the devil is always in the detail:

“The JV partners are clearly astute, commercial businessmen. They have a clear business model whereby they support distressed businesses and do not accept liabilities until they are satisfied they can hedge investment against secure income streams … At this juncture, the JV partners have put no direct cash into the project and have received nearly £45m in dividends and payments, and hold £63m of cash … in TWL accounts”.


This is on the back of £500 million-worth of public sector investment, which made those strips of land ready for the private sector operators to make these profits. Does this kind of approach show the principles of good and ethical public sector procurement that gives value to the taxpayer? If not, what will the Government do to ensure that this kind of deal does not happen again—not just in Teesside, but in any mayoral authority?

[Baroness Penn (Con)]

My Lords, as I have set out, there have already been clear public benefits to the redevelopment in Teesside. On the question of involving private partners in this work, the report sets out very clearly that the business case was clear: public sector funding would not be sufficient to complete remediation of the site and a private sector partner would be required. There are lessons to be learned from this report; the Government have been clear on that. That is why we have given the Mayor of Tees Valley time to consider the recommendations in the report, as the vast majority are for the mayor and combined authority. We will then look at those responses and consider the recommendations for the Government alongside that and take forward a process for improving accountability and transparency in this instance.

--- Later in debate ---

[Baroness Penn (Con)]

I say to the noble Baroness that we have considered the panel’s findings against the draft best value guidance, which was published in July 2023, and concluded that they do not meet the test for urgent intervention. The panel makes a number of recommendations for the combined authority, the development corporation and other partners, and some for government. We are now giving the mayor and partners time to reflect on the panel’s report. We have asked him to write to us and set out his action plan for responding to the recommendations within six weeks. One of the recommendations for government was around the clarity of legislation in this area and oversight arrangements. We will take that away and look at it carefully, because that is an area, for example, that could have read- across to other development corporations or combined authorities.

[Lord Scriven (LD)]

The Minister has mentioned a number of benefits—and no one disputes that regeneration benefits are required—but does she accept that those benefits have come totally on the back of public sector investment and that, as the report says, no private sector investment has gone towards them, yet still the liabilities for the land, if not used, lie with the public sector? That is the correct position, is it not?

[Baroness Penn (Con)]

The reality is that a project of this size will require significant public sector investment, which has taken place, but the review is also clear that remediation of this size and scale would not be able to take place without private partners also participating. We are making sure that we look at the lessons that we can learn from this review, but it is also important to consider both the option of doing nothing, which would have come at a multibillion-pound cost to the public purse, and the benefits that people in the local area are already reaping from the investment that has come in to date.