Darren Jones MP, who is chair of the House of Commons Business and Trade Committee, has said that the government have refused to give permission to the National Audit Office to undertake a full investigation at Teesside’s freeport.

Calls had been made, led by Liberal Democrat peer Paul Scriven, for the government to enact Section 6(3)(d) of the National Audit Act. This piece of legislation allows the NAO to conduct a full investigation into a public body, so long as it’s consented to by the public body in question and the secretary of state.

Conservative Tees Valley Mayor Ben Houchen wrote to Michael Gove, the secretary of state for Levelling Up, on Tuesday saying that he “wholeheartedly” adds his support to the review called for by Labour’s Lisa Nandy the previous day.

In a post on Facebook which shared the letter, the mayor also wrote of any new investigation: “I know that this is a waste of time and money.”

It comes after mounting speculation over previous weeks about public funds that have been spent on a scheme which has seen the transfer of shares from public to private ownership apparently for free.

The private partners, led by local businessmen Martin Corney and Chris Musgrave, now own 90 per cent of Teesworks Ltd, and it is believed that they could have made at least £45m in dividend payments over the last three years without investing any money themselves.

Mr Houchen chairs the South Tees Development Corporation which previously held 50% of shares in Teesworks Ltd.

In August 2022, Mr Houchen tweeted that “The National Audit Office have signed Teesworks off with flying colours,” adding that, “they have had access to every document relating to Teesworks. It is now beyond doubt that Teesworks represents open, honest progress on a world class site.”

However, it was revealed this week by the Financial Times that the NAO had not conducted any such review into the finances of the project and had asked Mr Houchen to correct his statements.

The review cited by Houchen was the result of the NAO’s response to questions raised by Middlesbrough MP Andy McDonald. The NAO’s statutory remit means that this investigation focused on whether the Tees Valley Combined Authority and its subsidiary the STDC had spent government money as it was intended, not on the full nature of accounting at the authority.

Since the abolition of the Audit Commission by David Cameron in 2015, statutory audits of public bodies are now undertaken by the private sector, but can be lengthy processes. The audit report of TVCA’s 2020-21 accounts was only published in August 2022. Auditors Mazar wrote that this was partly due to “significant weaknesses in the arrangements for accounts preparation”.

Tees Freeport: Government 'has not given permission' for National Audit Office investigation