Teesside Airport: where the buck never stops

11 December 2020

TVM goes in search of the decision makers at Teesside Airport

The public, having paid 100% of the cost of buying back Teesside Airport (TIAL), owns 75% of it.  This is because Ben Houchen and the TVCA saw fit to give 25% of its shares to Stobart Aviation, which is now the designated ‘airport operator’. 

Should we be worried?

Probably.

As we demonstrated in an earlier article (1), this shared ownership prevents public scrutiny. The public has only such information such as is put out in press releases by TIAL and Houchen’s PR team. 

Turning our attention to who makes the strategic decisions at the airport and how, we find a corporate structure so complex and convoluted that those charged with oversight and scrutiny are unlikely to ever get a clear view of what’s going on. 

Is that the way Houchen wants it?

It’s standard practice, where a public authority becomes involved in a commercial enterprise, to set up a company to run it, rather than manage it directly.  When Teesside was returned to public ownership, the airport company TIAL was set, as happened previously at Cardiff.

The authority then becomes the shareholder of this company, and a holding company is set up to manage the shareholding.  In Wales, a holding company called WGC Holdco was set up; at Teesside it was Goosepool 2019.  So far so good. 

But then it transpires that the two enterprises are run on quite different lines.

Cardiff first. 

Between Cardiff Airport company (CIAL) and the Welsh government is WGC Holdco, which reports back to the government on the airport’s performance. 

In order to ensure transparency at Cardiff Airport, none of WGC Holdco’s board members is involved directly with the airport company CIAL, and its board members may not serve on the Welsh Assembly.  The Welsh government owns 100% of the shares.

At Teesside things are different. They shouldn’t be.  That there are 2 shareholders rather than 1 should not, in itself,  prevent Goosepool 2019 from reporting TIAL’s performance back to shareholders.

Except that the board of Goosepool is independent neither of TIAL nor TVCA.

Of the 4 board members of Goosepool 2019, 2 are also members of the board of TIAL; Alison Fellows of the TVCA and David Soley.

So, if the board of Goosepool 2019 scrutinised the performance of TIAL, that would be like TIAL marking its own homework, which would not be a good look.

To fix things, the TVCA has created a scrutiny committee to do the job that Goosepool should be doing. 

And some people on that scrutiny committee have been complaining...

“I still have concerns about the information we are getting... With the overview and scrutiny committee we get information after decisions have been made and don’t get a chance to scrutinise until afterwards.” - Cllr Norma Stephenson recently (2).

The Gazette article does not state who the committee expects to get information from, but we expect that it’s Goosepool, as that’s whose job they’re doing. 

Meanwhile, the public is paying for everyone who works for Goosepool 2019, and we are entitled to know what it is that we are getting for our money.

One of the reasons that this arises is because, when David Soley was appointed as non-executive chairman of TIAL, it was announced that this position was unpaid.  It nowhere states, however, that his position as director of Goosepool 2019 is unpaid. (3)

(And he appears to be very grateful to Ben Houchen for some reason, as he has, either personally or through one of his companies, Ramscove Ltd, donated £20,000 to his campaign in the past year).

So, there are a few issues with Goosepool 2019, but at the airport itself, the board of TIAL is directing operations, and everything’s OK there. 

Right?

Well, not really.

To start with, that board is full of local councillors who have no expertise in airport management. 

When Houchen said that he was buying the airport, what he meant was that he was buying out the majority shareholding of the previous owner, Peel Holdings. 

But each of the councils in the region had a small shareholding in the airport, and Houchen didn’t buy them out. 

So they’re all represented on the board of TIAL, like a spare scrutiny committee, sitting alongside the airport directors proper.  What precisely they achieve by being there is anyone’s guess.  We suspect they’re as unhappy as the people on the TVCA airport scrutiny committee.

Is it all starting to look a bit tangled?  It gets worse.

A press release in May 2019 announced that “Durham Tees Valley Airport has unveiled its top management and oversight team”

Now TIAL has a board; there is a holding company, Goosepool 2019, which also has a board, and latterly a ‘top oversight and management team’.

This team contains Kate Willard of Stobart’s, on the board of Goosepool 2019, Phil Foster, head of airport development, on the board of TIAL, Alison Fellows of the TVCA, who, like David Soley, is on both boards, and Glyn Jones of Stobart’s who possibly sits on neither.

Possibly?

Yes.

In Oct 19, TIAL announced it was looking for a managing director:

“This appointment will be the first MD for the Airport since it was returned to public ownership with the role being filled on an interim basis by Glyn Jones, CEO, Stobart Aviation”. (4)

Oddly, however, Glyn Jones’ name, does not appear on Companies’ House records as a current or previous director of TIAL.

So it appears that TIAL remembered to tell the public about his role, but forgot to mention it to the authorities, which is a remarkable oversight given that people who serve on a board even for a single day are entered into the Companies’ House register.

As there is no evidence that a managing director has been appointed, presumably Glyn Jones is still filling that role in some (ethereal) way, which is just as well as, apart from him, Stobart’s is not represented on the board of TIAL at all.

But at least we know that Glyn Jones is in the TOP TEAM, so he’s definitely got skin in the game. 

Unless evidence emerges to the contrary, we shall have to assume that it is in TOP TEAM that strategic decisions are made, but it is not at all clear to whom this group is answerable.

It is also not at all clear why this group isn’t the board of TIAL itself. 

This is the case at Cardiff, why not at Teesside?

Perhaps the reason is that this top team is, in reality, answerable not to any of the boards or scrutiny committees, but to the one person whose name is conspicuous by its absence in all of this – Ben Houchen, the man behind the adverts.

The airport project is Houchen’s. Its organisation is his work, his responsibility. The opacity of its corporate structure is there because he wants it to be there, and the public’s money is disappearing down a rabbit hole.

It is the antithesis of public ownership as we know it.