Review of



"Tees Valley

Review"

Tees Valley mayor, Ben Houchen

Scott Hunter

31 January 2024



Survey media reports on the Teesworks Corruption Inquiry since yesterday evening, and the phrase ‘no corruption’ appears in every headline except the Guardian and the Yorkshire Post. It even made it into the FT. Meanwhile the phrase ‘non-statutory inquiry’ appears nowhere. That’s a PR coup for the inquiry’s architect, Michael Gove, for years now Houchen’s greatest cheerleader. 

Relative to this bold, simple headline, the caveat that there is a lack of transparency at the TVCA, STDC and Teesworks Ltd appears abstract. Bad, but not that bad. 

So, the report delivers everything Gove wanted it to. Except, that is, for a line under the whole episode.

In reality, the report dwells at considerable length on just how bad the lack of transparency is and how dysfunctional it makes both TVCA and STDC. We discuss those issues below, as well the matter of why the inquiry panel could never have come up with a guilty verdict on corruption.

But first, we feel there is a need to deal with another issue – political manipulation.

Manipulation in the compiling of the Report

The executive summary in the report is, in certain respects, odd. It is very upbeat about the whole Teesworks enterprise, and it contains information that is either not in the body of the report at all, or at least not central to its concerns. Section 1.4, for example, begins,

“There are many voices which articulate a positive view of the project, highlighting the work that has been done and the clear evidence of the achievements which have been made”

The body of the report makes no sweeping statements and gives no indication of who these ‘many voices’ might belong to. Certainly not many of the people they interviewed during their investigation.

So different in tone is this summary from the investigation that follows that we asked the inquiry lead, Angie Ridgwell if the panel had, in fact, written it. Her was response was that they had. They had written all of the text. From this we extrapolate that they are happy to take ownership of its contents.

She also informed us that we should read no significance into the fact that their names do not appear anywhere on the document. We, of course, suspected that the omission was because the panel members were unhappy to put their names to a document that others had altered prior to publication.

Our suspicions are now allayed.

Mistitled report

To call this “Tees Valley Review” is misleading. The panel were directed to consider only evidence relating to Teesworks. The millions in public money disappearing into Teesside Airport without trace is not part of the discussion.

The panel does report, however, (in section 10.6) that they attempted to elicit information about the airport business park joint venture but were refused.

Overview of relevant organisations

The Tees Valley Combined Authority (TVCA) is comprised of five local authorities. Each is represented on the board of the TVCA. The South Tees Development Corporation is a subsidiary of TVCA.  Most of its funding either comes in the form of direct loans or grants from TVCA, or from government, where the money goes to TVCA and is passed on. It now raises a certain amount of revenue of its own, currently through the sale of scrap (and possibly aggregates). TVCA oversees STDC and is responsible for ensuring it delivers value for money.

STDC has, since July 2020, used “Teesworks” as a brand name.

Teesworks the brand name is not to be confused with Teesworks Ltd (TWL) the company. TWL was the new name given to South Tees Enterprises Ltd (STEL)in July 2020. STEL was set up in late 2019 by developers Corney and Musgrave. In July 2020, TVCA CEO Julie Gilhespie became a director.

In 2020, STDC had a 50% share in TWL. In November 2021, this was reduced to 10% as 40% of its shareholding was given to Corney and Musgrave. TWL is a trading company, and its revenue comes from selling materials to STDC, and now from the lease of land to SeAH Wind, the company building a monopile factory on the Teesworks site.

Corney and Musgrave also run a number of other companies whose business is focused on the Teesworks site. Among these is DCS Industrial Ltd (DCS).

Corruption? No Corruption

The phrase from the report that made the headlines was “no corruption”. For most of them this was equivalent to ‘nothing to see here’ and means that they can go back to the day job of continuing to ignore any political issue that arises beyond Westminster.

For those of us for whom the issue is not about to go away, there is a need to look more closely at ‘no corruption’.

The phrase is used twice in the report – in the executive summary and in the conclusion (section 22.2). There is no chapter devoted directly to such allegations. Yet they interviewed Andy McDonald MP and Richard Brooks of Private Eye.

The fact that they don’t directly discuss corruption is presumably why they don’t provide us with an explanation of what they mean by it. For us, corruption occurs where a public servant acts in a way that is against the public interest to the benefit of a third party.

In that respect, the discussion in our recent report - 12-august-2019-the-day-the-teesworks-corruption-scandal-began-in-earnest – Houchen’s removal from the compulsory purchase order of Redcar Bulk Terminal should be evaluated. Corney and Musgrave benefited from it at the expense of the public interest.

In our view the arrangement whereby the developers may choose which land parcels on the site they wish to acquire, leaving STDC with stranded liabilities, is another (i.e. STDC will be left with bits of land such as High Tip that are too contaminated to redevelop).

Whether or not the Tees Valley Review authors would agree with our definition is unknown. But one of the reasons that they could find no evidence of corruption was that they were in no position to.

This ‘review’ was equivalent to a non-statutory inquiry, where people are invited to give evidence but are not compelled to (and the report’s authors give an example of one person who refused). Those who do can be interviewed but not cross-examined, and the inquiry panel can level no sanction against anyone whose testimony is false.

And the panel observes one instance where it was revealed that they were given false information (contained in the discussion of how officers of Redcar and Cleveland Council were coerced over alterations to a roundabout at a site entrance, in chapter 21).

Given that the purpose of the inquiry was to investigate corruption, it is to be expected that anyone guilty of it would do their utmost to disguise it. The panel therefore never stood a chance of being able to elicit evidence of corruption from witness testimony.

Issues with STDC Governance? Yes, and Issues with STDC Governor

Since the report was published mayor Houchen has been on the airwaves to deliver his response to it. The gist of this is, ‘of course there are issues of governance that we have to deal with. No organisation gets everything right first time round, but we will look at the criticisms made and deal with the issues’.

This neatly sidesteps the fact that what the report is really saying is that he is the problem, together with TVCA CEO, Julie Gilhespie. The issues that the organisation as a whole has with governance arise because of the way that Houchen likes it to be run. The public interest may require transparency, but Houchen most definitely doesn’t.

So what exactly is Houchen doing that he shouldn’t? First, putting himself in charge of everything. TVCA, as the public authority, should be able to scrutinise and evaluate the performance of STDC. That should be the job of the TVCA cabinet. But Houchen chairs both, and so is his own judge. TVCA CEO and its director of finance also sit on both boards.

Secondly, other members of these boards are routinely underinformed about developments and changes in policy. Agenda papers for meetings are often delivered late, giving board members little time to examine them, and lack sufficient detail for them to make proper evaluation. A lot of information is received by them only verbally; again, lacking in detail and providing members with little opportunity to evaluate.

A select few are kept very well informed of developments. Here, the panel has been less explicit than, we believe it should have been. It is clear from the text that the well informed include Houchen, Gilhespie and Finance director Gary Macdonald. It is also clear that the report’s authors consider that having such an inner circle is inappropriate. But they do not identify who else is in it:

“In practice, given the degree of delegation and the reporting arrangements, information and oversight of the project sits with a small number of individuals, primarily the statutory officers and the Mayor. STDC Board members, TVCA Cabinet, both Audit committees as well as TVCA Scrutiny committee, together with the constituent authorities, are heavily reliant on those individuals to provide them with a full and accurate picture to enable decisions to be taken in the best interests of the public. This tight control of information 17 | Page enhances the risk of misinformation and when aligned to late reports, a lack of detail and overt reliance on verbal reporting, this can undermine appropriate decision making” section 9.7

This is a serious omission. The people the panel have cleared of corruption are in that inner circle. Their report should have told us who they are. This is all the more important given that it may be the case that two of them are Corney and Musgrave themselves.

Elsewhere in the report the authors discuss the fact that Corney and Musgrave, or their representatives, on occasion, attend STDC board meetings. This gives them access to confidential discussion and material which they should not have. This access is one of the things that the panel find wholly inappropriate:

“The Panel is also aware, that representatives of the JV Partners participate in STDC governance meetings on occasion to ensure that work is "joined up and effectively and efficiently delivered". We understand from Board member interviews9 that this includes confidential STDC Board discussions. Of course partnership working requires the JV Partners or their representatives to be involved appropriately in operational discussions. The Panel believes it is wholly inappropriate for the JV Partners or their representatives to be included in any confidential Board discussions. In all meetings it is important that conflicts of interest are managed, declared and observed.” Section 9.9

Nepotism and Cronyism

To the casual observer, nepotism and cronyism are, in themselves, aspects of corruption. Not for this panel, however, despite the fact that most of chapter 21 of the report is devoted to examples of it.

The Mysterious Workings of Teesworks Ltd

Despite the fact that the developers are extracting vast profits from the site, neither the board of STDC, nor the TVCA cabinet, nor the review panel has access to documentation from them about what they are doing on the site. When the panel tried to obtain information, they were directed to the company’s statements of accounts on the Companies’ House website (and to call this ‘skeleton information’ should be understood to exaggerate the amount of detail these contain).

Misinformation and Missing Information

The panel observe that they found TVCA and STDC officers unhelpful when they attempted to obtain clarifications about documents they had been sent:

“… our experience has been that securing the information in a way that could be easily navigated was challenging. Initially, the Panel were overwhelmed with documents presented in an unstructured way and lacking a cohesive narrative. 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.”

Put it another way, you get the feeling that this is an organisation with something to hide. At TVM, we’ve had that feeling for some time.

Is it all over?

Houchen and Gove would undoubtedly like to think so. We beg to differ.