Investigation into Teesworks project launched by Government following 'cronyism' allegations

The Government has ordered an independent investigation into the Teesworks redevelopment project in a bid to clear it from allegations of “corruption”.

Yesterday Michael Gove, the Levelling Up Secretary, responded to calls for an inquiry led by the public spending watchdog by agreeing to a panel which will investigate allegations over the potential misuse of public funds, such as those reported by The Yorkshire Post.

In a letter to Ben Houchen, the Tees Valley mayor who is spearheading the project, the cabinet minister said that he did not feel a full investigation by the National Audit Office (NAO), as called for by Mr Houchen and Labour MPs, would be appropriate.

The watchdog would only be able to investigate at the instruction of the Government, it confirmed, while Mr Gove argued that it would be an overreach of the body’s current powers to look into local government projects such as Teesworks.

In its place he agreed to set up an independent panel who would take evidence from politicians, activists and stakeholders on the 4,500 acre Teesside project which has been mired in allegations of corruption and cronyism in recent months.

Ministers hope that the investigation will clear the project, which has been championed by senior Tory politicians including Rishi Sunak, with Mr Gove specifying that the allegations of corruption would be “directly” looked at by the panel.

Repeated concerns have been raised over the involvement of private investors in the work, and the circumstances in which they were able to acquire a large stake in the project, despite doubts over whether this was backed up with investment .

This has led to allegations from Labour MPs in the region that there is a risk that public money has been misspent, and that private investors have profited as a result, leading to calls for the NAO to fully investigate the project.

Mr Gove yesterday said that the allegations of corruption posed a “very real risk” to the project’s ambition to deliver jobs for the region, but that he was not satisfied that taxpayers were being mistreated.

The Levelling Up Secretary said that he would welcome the NAO updating its review of Government funding of the South Tees Development Corporation (STDC).

Following the announcement, an independent panel will shortly be appointed to carry out the work of investigating the project, the Government confirmed.

Ben Houchen, the Tees Valley Mayor, welcomed the independent review, saying in a statement: “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.

It comes after Rishi Sunak appeared to confirm the investigation during Prime Minister’s Questions, adding: “but what I would say, it is just the same old Labour”.

“All we get after years of neglect, it is the Conservatives that are delivering for Teesside.”

Sharon Hodgson, the Labour MP for Washington and Sunderland West, said she was “glad” the Government had broken its silence over Teesworks.

“I worry this won’t probe deep enough into the issues reported by Private Eye, the FT, Yorkshire Post and my colleagues on Teesside,” she added.

“There is a real need for honest and open scrutiny in this case, so this investigation must be truly independent of all involved - something a full NAO audit would achieve.”

Lisa Nandy, Labour’s shadow levelling up secretary, said: “The government must not hide from proper scrutiny, and there is no clear justification for not ordering a comprehensive, independent investigation from the NAO.”

Andy McDonald, the Labour MP for Middlesbrough, accused the Government of “bottling it” over the failure to order an NAO investigation.

However, Simon Clarke, the former levelling up secretary and MP for Middlesbrough South, accused Labour of behaving “abysmally” and using legal protections from speaking in Parliament to make accusations they refuse to make in public.

“The truth will come out and all those who have attempted to discredit a project that will deliver tens of thousands of good jobs for Teesside will have to answer for their cynical wrecking campaign,” he added.