The development money tap

What happens when devolved mayors, giddy with power, assume ownership over public assets was brought to light recently in an investigation into the activities of Ben Houchen, mayor of the Tees Valley.

Lack of accountability and scrutiny by Whitehall had allowed him to transfer an estimated £124 million in profits from former steel industry land at Redcar to two commercial property companies, JC Musgrave Capital, and Northern Land Management.

Their Teesworks Ltd (aka “Britain’s carbon capture capital”) was billed as the centrepiece of Britain’s largest freeport, and as Europe's largest brownfield site, comprising 4,500 acres. It offered tax and customs incentives to businesses seeking to locate there.

Local people suspected a case of no more “muck”, but still plenty of ill-gotten “brass”. An inquiry, instigated in May last year by fellow Tory Michael Gove (so hardly independent), lay buried under the weight of its own paperwork until January 2024.

Legal nicety decided allegations of cronyism and corruption to be unfounded. But there is plenty of criticism of the mayor’s South Tees Development Corporation, which in partnership with the venture capitalists secretly misused taxpayer funds and cherry-picked the most profitable parts of the old steel works. Promises to invest in job creation were found largely to be false.

The private property developers have ended up owning 90 per cent of the site. The report noted that they put no money into the scheme, but they have made money on the back of the public sector investment of more than £560 million.

More broadly, the review found a culture of excessive confidentiality and a lack of transparency at the development corporation.

The inquiry concluded that “inappropriate decisions and a lack of transparency which fail to guard against allegations of wrongdoing are occurring, and the principles of spending public money are not being observed.”

In other words, hiding the truth – just one aspect of capital’s war on workers.