Should Labour intervene in Ben Houchen’s Teesworks? Last May, the government announced an independent review into “specific allegations” over England’s largest regeneration programme, championed by the Conservative mayor of Tees Valley. Labour has said that, if it wins the election, it will send the National Audit Office (NAO) in to investigate after serious questions were raised about the decision to transfer 90 per cent of the Teesworks development to two local, private developers. The project received hundreds of millions of pounds in taxpayers’ subsidies.
Houchen has denied allegations of wrongdoing, and he pressed the government for an independent inquiry. The government’s review was roundly criticised for its “limited remit” (set out by Houchen’s fellow Conservative Michael Gove). The move was not enough to placate MPs that taxpayers’ money was properly distributed, however. The cross-party Business and Trade Select Committee has called on Houchen to re-negotiate the deal.
The Tees Valley mayor is no stranger to controversy. South Tees Development Corporation (STDC)—which Houchen also oversees—lost a High Court fight against Britain’s fifth-largest port operator, PD Ports, over rights to access land across the Teesworks site, in order to reach land that PD Ports owns. Losing the court case has left the STDC, which is taxpayer funded, with legal bills in the region of £4m. In court, PD Ports accused the corporation of attempting to hold them “to ransom” for the access.
And Houchen shows no sign of parking his boosterism. The mayor, who was elected for a third term in May, has pledged to build a new hospital—despite the Department of Health and Social Care being clear that “the Mayor does not have the relevant powers to build a new hospital”. Houchen did unveil an entirely sensible initiative recently—£1 bus fares for under-21s—but even this was done theatrically. A Freedom of Information Request by the Covert Councillor reveals that an oversized £1 coin which Houchen was photographed holding in order to promote the scheme cost his authority £40—equivalent to, er, 40 bus journeys for under-21s in Tees Valley.
Houchen is a marmite figure. Yet his recent electoral victory suggests he is liked more than he is disliked—even if his vote share dropped from 73 per cent in 2021 to 54 per cent in May.
All this puts a new Starmer government in a difficult position. If Angela Rayner, as levelling up secretary, asks the NAO to investigate what happened at Teeworks, then at some point she will face pressure to take the same action against Labour mayors. The mayor of the West of England, Dan Norris—who is also Labour’s parliamentary candidate standing against none other than Jacob Rees-Mogg—is a case in point. Norris’s authority spent £10,000 on posters with his face—and his dog—emblazoned on them. They were intended for display on public transport, but the posters were never used. The authority was criticised for using taxpayers cash on what amounted to “unlawful expenditure”.
Norris’s authority has also been hit with a Best Value Notice—meaning the government is concerned that the authority isn’t providing “value for money”—following issues with the “poor state of professional relationships”, the absence of a “shared narrative” and the lack of clarity surrounding its constitution, as stated in a letter from the Department for Levelling Up, Housing & Communities to the authority.
Norris isn’t alone. His counterpart in Cambridgeshire & Peterborough Combined Authority, Nik Johnson, has been in trouble, too. Johnson failed to take action against allegations of bullying in his office in what an investigation found “amounted to him condoning such behaviour”. For his “significant failure” of leadership, a cross-party panel established by the authority’s audit and governance committee determined that Johnson should apologise and undergo training.
Labour could send in the NAO, or the commissioners appointed by the government to resolve issues in local authorities. Commissioners have not been universally welcomed, especially by councillors in Liverpool and Nottingham. They have been accused of taking decisions away from democratically elected councillors, but they have been effective. The current lead commissioner in bankrupt Birmingham council is Max Caller, the former managing director of Hackney Council, who took over the London authority just before it issued a section 114 notice in 2000. Now Caller is the government’s first port-of-call when authorities are in trouble, and is well-known for taking a hardline approach against failed councils. Back in the noughties, locals protesting against emergency cuts to local services dubbed him “Mad Max, the butcher of Hackney”.
The election won’t make the question marks over Teesworks, or other mayoral combined authorities, disappear. In fact, with the overwhelming majority of England’s metro mayors proud owners of red rosettes, problems in local governance will only continue to pose a political challenge for Keir Starmer as prime minister. And given that some of those mayors—Andy Burnham and Steve Rotheram, for instance—are also the proud owners of very strong personal mandates, Labour’s central authority will be challenged from the regions. The party’s response in government will be a test of how well it can handle the tensions between respecting the devolution of power, and ensuring taxpayers money does not go to waste.
