Michael Gove has refused to set a deadline for an independent report on allegations of “corruption, wrongdoing and illegality” at Teesworks, the industrial development within the government’s high-profile freeport project.
The levelling up secretary ordered a review into financial dealings and governance at the joint venture between Tory Tees Valley mayor Ben Houchen’s South Tees Development Corporation and companies run by two local developers.
After political anger that Gove had declined to act on calls to bring in the National Audit Office to lead the investigation – instead announcing that it would be undertaken by an independent panel of his choosing – local MPs have criticised delays in the process before mayoral elections on Teesside in May.
Gove said he hoped the inquiry would report before voters go to the ballot box, but refused to commit to a timeline under questioning from MPs on the Commons business committee on Wednesday.
“I always wanted it to be as quickly as possible, but it’s also important that it is comprehensive,” he said.
The government had intended that the investigation, led by the chief executive of Lancashire county council, Angie Ridgwell, would be completed last summer. However, it was delayed until autumn, then winter, and then this coming spring.
The north-east Labour MP Ian Lavery told Gove there was a “big feeling this has been kicked into the long grass because of the mayoral elections in Teesside” and asked the levelling up secretary to give a commitment that this was not the case.
Gove said he could not “force the hand of an independent investigator” to hurry out a report and declined to commit to publication before the election.
“The team know that we’d like them to report as quickly and comprehensively as possible,” he said. “Of course, no one wants it published more than Ben Houchen himself, because he wants the mayoral election to be about what he’s achieved, his record, his plans for the future, and for all of these issues to be out there, tackled, and people being able to make a judgment based on the facts.”
The questions for the government come after Teesworks reported that net profits had tripled last year to £54m, according to details first reported this week by the Financial Times. The venture had been transferred in late 2021 from a 50-50 public-private partnership, established in 2020, to majority private ownership, with two Teesside developers – Chris Musgrave and Martin Corney – increasing their stake to 90%.
Liam Byrne, the Labour chair of the business committee, said Teesworks’ accounts showed 110 acres of public land had been bought by a company 90% owned by “friends and close associates of Lord Houchen” for £1 an acre, resulting in the generation of profits “which have now largely gone out to these private shareholders”.
Asking Gove if best value for taxpayers had been secured, he said: “A company that has bought 110 acres for £1 an acre is now turning over £143m and shovelling £50m out to private shareholders in profits.”
The levelling up secretary said he could not “pre-empt” the outcome of the review, but argued he had full confidence in Houchen.
“I have the highest regard for him,” he said. “In all of my observations and dealings with him, I think he’s a first-rate public servant who has been responsible for the economic transformation of the Tees valley, and he is a great and visionary leader in local government.”
