Teesworks: Accountability and Scrutiny

Sharon Hodgson Excerpts

Wednesday 7th June 2023 Commons Chamber

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

I want to raise three concerns in particular regarding Teesworks and Teesside. First, there are serious questions on the oversight of contracts that the Tees Valley Combined Mayoral Authority or its bodies have entered into on the land deal and other contracts relating to Teesworks, and the management of the project is risking its success. Secondly, there needs to be more scrutiny over the process by which contracts are won, not only at Teesworks, but at a sister structure in the airport. Thirdly, the Government’s model of mayoral development corporations lacks sufficient local democratic scrutiny and accountability checks.

I want to add to the genuine arguments already made, in good faith, by colleagues in support of a full NAO investigation into Teesworks. There are simply questions that only the NAO can find the answers to—with every stone we overturn on Teesside, a new list of questions appears. Colleagues have already described the deal, so I will not repeat the details, but there are clearly questions that remain unanswered.

How did the developers first know to buy the option to lease from Redcar Bulk Terminal Ltd in 2019? What due diligence was done on their credentials to take over operations for the largest brownfield site in Europe? How much money have they personally risked on the project? Why was there no procurement exercise conducted for the relationship and no contract published?

Then there are the side deals that colleagues have touched upon. Failing an NAO audit on the entire project, will the Government’s independent investigation look beyond the land deal to the project’s side deals? Take Teesworks Quay Ltd, for example, or the contractors taking immense profits from the sites, and how those deals came about.

Those questions are all important, because we want to know that the progress of the project is by the book and that no corners are being cut, even though potential issues with the progress of the project have gained significant attention in the last year. Mass marine die-offs continue to plague north-east beaches, a worker only just survived after an excavator fell into the river and it is reported that relationships with significant industrial partners have flatlined, antagonised by the Mayor’s legal action. But the public relations operation churns on, aggrandising speculative jobs—as we have heard again in this debate—and investment brought to the area, and painting a picture that just does not match the reality.

Coming to my second point, I am interested to know whether the investigation will scrutinise the process by which contracts have been won generally. Again, my concerns have come about because questions raised about the oversight of the projects have been brushed away, obstructed or avoided. Teesworks’ sister structure at the airport, part of the freeport, is another Tees Valley CMA asset that has received millions of pounds of public money. The same two private developers at Teesworks became joint venture partners in Teesside International Airport Business Park in March 2020. What tender or public process was conducted for that?

Since the airport has struggled to reap rewards from the runway, it has turned to the business park to bring profit. In March, it awarded its first contract for the business park to GMI Construction Group. GMI was recorded as having paid for the lobbying services of Recognition Services Ltd, whose director, Graham Robb, conveniently sits on the South Tees Development Corporation board and reportedly does the Mayor’s public relations, too. What was the significance of that relationship in the awarding of the contract to GMI? What tender process took place, and why will the Mayor not assure the public that due diligence took place? We need to address exactly what is going on in Teesside with that web of connected parties.

That points to my final concern on the whole governance model in the Tees Valley Combined Authority. It is only right that constituents in places with combined authorities should be able to hold local leaders accountable to the same standards as they can the Government here in Westminster, but almost every week, we hear new, disturbing reports out of Teesside that legitimately question the probity, decision-making and value for money across different wings of Ben Houchen’s combined authority, following painstaking investigation from highly respected journalists.

Why has the Mayor been able to push decisions through, under the radar, with little or no scrutiny? What oversight of all those decisions really takes place, and why are the public not allowed to see any of it? Why are STDC and the developers allowed to mark their own homework? Why are the people responsible for the performance of projects also the judges of their progress? These basic questions point to a serious flaw in governance.

We are not raising these concerns to talk down Teesside. In fact, protecting and future-proofing the projects is the reason why these matters must be raised today. The stakes are so incredibly high; we need the projects to succeed. That does not mean closing more doors to scrutiny. Local accountability has clearly been unable to address these concerns, and Government supervision, or lack of, has allowed for what could be a huge failure in industrial strategy that affects the people of Teesside and our green ambitions.

This is an opportunity to finally right any wrongs by giving full investigatory remit to a body with the powers and capacity to probe deep into what has happened, including by ensuring that officials who have previously worked as part of STDC, the freeport or a related public body are free to comply with an investigation, regardless of any non-disclosure agreements that may exist. From there, we can learn lessons so that local communities can better scrutinise their combined authority Mayors through an operational structure that prevents conflicts of interest and the secrecy that has been so damaging to local politics and business relations on Teesside—maybe taking inspiration from the Welsh Government’s arrangements for Cardiff.

The Levelling Up Secretary knows that it is inevitable that this will all eventually come to light, so I implore him to allow a full NAO audit. If there is nothing to hide, why not open that door? For him to suggest that north-east colleagues are on a misinformation campaign is deeply disingenuous. Will he say the same of well-respected journalists, and news outlets such as the Financial Times, which are also asking these questions? I expect he will not.

I want these projects to be a success for Teesside and the wider north-east, which I care about deeply, but that should not mean that there are obstructions to finding out the truth. Selling a dream of success that does not match reality does not deliver that success to the people of Teesside. If the Government insist on proceeding with their own Department-led inquiry, it must answer the three concerns that I have laid out: why and how did the land deal and other contracts fall into private hands, what scrutiny is there of how wider contracts are won, and when will the Government remedy the gaps in oversight and accountability for the wider devolution ambition? Only once these questions have been addressed can we reassure Teesside communities that they are the priority, not private profit. Government obstruction without clear justification will only kick the can down the road, stalling any progress in the north-east. I urge the Government to reconsider their course of action.

[Several hon. Members rose—]