Government reveals panel to investigate Teesworks financial arrangements

Following allegations of “industrial-scale corruption” and “cronyism” in relation to the redevelopment project at the former Redcar steelworks, Levelling Up secretary Michael Gove announced last month that an independent panel would investigate the finance and governance at the South Tees Development Corporation (STDC).

The public body was a 50-50 joint partner in Teesworks Ltd, but transferred most of its equity to local businessmen Chris Musgrave and Martin Corney in December 2021.

Musgrave and Corney have reportedly made more than £45m from the sale of scrap taken from the demolished steelworks - apparently without investing a penny into the project.

There were originally calls for an investigation to be led by the National Audit Office (NAO), which were even echoed by Tees Valley’s Conservative mayor Ben Houchen. However, Mr Gove announced an “external assurance review” would take place by a panel that he would appoint because the NAO’s remit was not broad enough.

The panel’s lead reviewer is Angie Ridgwell, chief executive of Lancashire County Council; previously Director General at the Department for Business, Energy and Industrial Strategy.

She’s supported by Quentin Baker, director of law and governance at Hertfordshire County Council, and Richard Paver, a former Treasurer at the Greater Manchester Combined Authority.

The terms of reference for the review will focus on two strands - finance and governance - and has set out 7 key questions to be answered relating to these themes including governance arrangements at the STDC and Tees Valley Combined Authority (TVCA) and whether there was appropriate oversight of the transfer of shares and sale of land.

The panel’s announcement comes as a debate begins in Parliament where the Labour party is seeking to force the government to reveal all correspondence relating to its decision to set up their own inquiry into the redevelopment of the Teesside steelworks, rather than a fully independent investigation by the public spending watchdog.

Ben Houchen said: “I feel that an independent review is necessary to show investors, businesses and local people that there is no corruption, wrongdoing or illegality in what has become and continues to be an incredible project for jobs and investment in our region.

“I look forward to the outcome, in due course, and will be making no further comment until the independent review has been completed, so to allow the independent body to carry out their work without influence or favour. My officers stand ready to provide any and all information requested by the independent review.”

Local Government Minister Lee Rowley said: “I want to stress we have not seen evidence of corruption, wrongdoing, or illegality in relation to Teesworks, but it is apparent the allegations present a risk to the delivery of jobs and economic growth in the region.

“Given the importance to Tees Valley of addressing this matter, and the request made by the Mayor, the government has appointed an independent panel to review the arrangements.”