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Good afternoon. You wait eight months for further news about an ongoing controversy, and then suddenly you get hundreds of pages of news.
This year, following the January Critical Independent Review Learn about Teesworks, the country’s largest regeneration project, and the devolved public governance behind it.
Until last Friday, the Tees Valley Combined Authority, led by Conservative mayor Lord Ben Houchen, had given some expected response to ministers. Found me.
This will be introduced in detail below.
Crucially, its contents will present challenges not only to Houchen but also to the Labour Party now in Downing Street.
“Poor concentration, low efficiency, bad temper”
The Tees Valley Review in January was met with great enthusiasm. dispute Teesworks Ltd is a four-year-old public-private partnership between Houchen’s South Tees Development Corporation and two local developers to redevelop the vast SSI steelworks in Redcar.
At the heart of the debate are questions about transparency and value for money – specifically, whether taxpayers are doing themselves a disservice by giving businessmen the biggest deal of their lives.
The tightly controlled scope of the final review meant that it could not make a definitive statement on the latter point.
But it did recommend that the deal be renegotiated. At the same time, it raised questions about procurement, recruitment, decision-making, transparency and democratic scrutiny at the Tees Valley Combined Authority, which Houchen chairs.
It’s a long list to oversee economic development in one of England’s most deprived post-industrial areas.
TVCA is the parent company of three of the country’s four Mayoral Development Companies – local regeneration agencies tasked with delivering rapid results – and is a major shareholder in publicly owned Teesside International Airport, all of which receive public funding. So shortcomings in its governance could have wider implications for taxpayers.
Its response to the January report now suggests that several external reviews conducted since then have found additional issues.
Some of these rights extend beyond the Tees Valley region, spanning the relatively immature British system of devolution.
The Centre for Governance and Scrutiny (CfGS) notes that the scrutiny function in many combined authorities has only been in existence as a model for a decade and has yet to take hold.
Meanwhile, the Chartered Institute of Public Accountants (CIPA) highlighted a “structural” problem in audit: there was a “relatively constrained” market in the north-east of England that was unable to service a public body of TVCA’s size and risk profile.
Still, some of the problems lie with the organization itself—chief among them its political culture.
The CfGS highlighted “combative” behaviour between the mayor and the councillors who were supposed to be scrutinising his activities, noting that mistrust and confrontation led to “unfocused, unproductive and bad-tempered” exchanges.
This is a feature of Tees Valley politics, and the Canadian Labour Party is well aware that it does much to prevent necessary democratic oversight of decision-making and spending.
The research found problems with the mayor’s attendance at meetings, as well as deep-seated divisions over whether councillors could directly scrutinise the activities of the South Tees Development Corporation.
The mayor and his executive team have long maintained that as an independent, quasi-commercial entity, the company is outside the scope of their review.
Yet it still receives more than £500m of taxpayers’ money and is expected to borrow £450m from the joint body in charge of the project. This, combined with the mayor’s frequent claims about the benefits of the Teesworks project, has fuelled people’s thirst for information.
The new legal advice contained in the latest document largely sides with MPs, arguing that they have every right to demand information from companies within certain limits.
The response document also shows that CIPFA found a number of audit issues, including delays, cancelled audit meetings, non-existent paperwork, and violations of national standards.
This may sound parochial, but it also raises wider policy challenges for ministers.
Perhaps the most pressing question is, what will they do when they receive all those documents next month?
The Tees Valley review raised a number of questions about how risks and rewards were allocated in the Teesworks deal, including one question: Highly profitable Because the developer has 90% control.
but As businessmen pointed outThis is a legally binding agreement freely entered into by the public sector.
The new government is keen to keep investment off the books and is keen on public-private partnerships. Teesworks could be a cautionary tale.
Meanwhile, in the spring mayoral campaign Rachel Reeves Without hesitation, he made the commitment and vowed to send NAO to Teesworks.
Since she joined the Treasury, such talk has faded, although Labour MPs on Teesside reiterated the pledge during the general election.
A ‘best value’ review of authorities (a local government inspection, which is easier to implement than a National Audit Office intervention) might be more likely.
But would a government keen on further devolution and regional development want to take on the country’s only Conservative mayor on day one?
Other challenges relate to wider devolution in England.
Clearly, not everywhere has the culture of collaboration on which the emerging mayoral system outside London relies.
Local government and auditing are also notoriously weak.
But that doesn’t mean decentralization is hopeless, as there are solutions to these problems, some of which may already be on the to-do list of new Deputy Prime Minister Angela Rayner.
But for now, they pose a challenge to governments that are committed to growth but are still searching for their chosen levers.
UK Numbers
Findings from a review originally commissioned by Labor when in opposition on regional growth and public-private partnerships Interesting reads from last week.
The panel, led by former Siemens UK chief executive and current GB Energy boss Juergen Maier, looked at how the new government could meet the country’s long-unmet transport infrastructure needs – particularly in the north of England.
They concluded that a new generation of public-private partnerships, following some of the models used in France and other countries, was needed to help close the “deep and growing productivity gap.”
As shown in the chart above, rail demand in major regional cities is expected to increase significantly over the next few years, a point noted by the National Infrastructure Commission In its May annual update.
However, the National Audit Office July Discovery As HS2 North has not been cancelled, the Department for Transport effectively has only two options when it comes to capacity on the West Coast Main Line: reduce passengers, or build some infrastructure.
This public-private partnership proposal mirrors what the mayors of Greater Manchester and the West Midlands proposed following the cancellation of HS2.
When those mayors proposed that premise back in the spring, their intent was probably more to keep the idea alive until a new government was formed than to change the minds of current ministers.
So it is now up to Labour to decide how to meet these political and economic demands, which are certainly not going away.
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Current situation in the UK Today by Darren Dodd. Premium subscribers can Register Here Get it delivered straight to their inbox every Thursday afternoon. Or you can subscribe to Premium here. Read earlier editions of the newsletter here.
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