Labour calls for investigation into Teesworks development amid accusations in Parliament of ‘corruption’

Labour has called for an independent investigation into a controversial redevelopment project on Teesside, because of “very serious questions” about the way public money has been used by private developers.

Shadow Levelling Up Secretary Lisa Nandy has written to the National Audit Office (NAO) to request that the watchdog launches an inquiry into the Teesworks project, led by Conservative Tees Valley mayor Ben Houchen.

Houchen has said he is “quite happy” for there to be an investigation and submitted a letter to the NAO, asking for their remit to be expanded as an exception to allow them to investigate.

The letter follows a report in the Financial Times suggesting that a 90% stake in the company set up to operate the former steelworks site was transferred to two local developers without a public tender process taking place.

Houchen has denied any wrongdoing and defended the project, accusing critics of being politically motivated, including Private Eye magazine, which has been reporting on potential issues with the development for some time.

Labour ‘deeply concerned’ about Teesworks project

Lisa Nandy has written to the head of the NAO to say she is “deeply concerned” about the project, which is part of the Teesside freeport development.

Citing the FT’s reporting, Nandy says the government has spent “hundreds of millions of pounds of public money” on the project, but that two private developers now control a 90% stake and have already secured £45 million in dividends “despite failing to invest any of their own money”.

The accusations levelled against Houchen centre around the sale of the site to Teesworks Limited, a company controlled by local developers Chris Musgrave and Martin Corney, by a subsidiary of the publicly-funded South Tees Development Corporation, which is chaired by Houchen.

Millions of taxpayer money is being spent clearing the site of the former Redcar Steelworks site for redevelopment, but there are concerns that when this land is leased to investors a majority of the profits will go to companies controlled by Musgrave and Corney.

In the letter, Nandy says she believes an investigation is required to “answer important questions about the transfer of a vital public asset into private ownership, the potential loss to the public from these transactions, and the almost total absence of sufficiently robust oversight or accountability at national, regional or local level”.

Nandy said: "There seems to have been no scrutiny or basic oversight from Ministers. Instead they’ve simply signed off on this deal and walked away. There must be a comprehensive, independent investigation to ensure the public interest is protected."

Houchen has said claims of wrongdoing are “untrue,” while accusing Labour of “trying to pull down” work by the combined authority.

He added: “I am quite happy to put all that to bed and allow the Labour Party to have an investigation.”

Middlesbrough MP Andy McDonald has repeatedly raised concerns about the project, telling Parliament saying that “industrial-scale corruption” is taking place and citing Private Eye’s reporting.

Responding to comments by McDonald last week, Houchen released a statement, describing the MP as “a coward who stood up in parliament and lied”.

He said: “His unfounded, defamatory comments could have cost Teesside millions in investment and thousands of local jobs. Thankfully, we’ve been able to provide assurances that his comments are completely false.

He added: “Andy McDonald stood up in Parliament and lied to try and destroy the progress we’ve made because he thinks slowing down progress helps the Labour Party politically.”

NationalWorld approached Tees Valley Combined Authority for comment on this article.