Tees Valley Combined Authority hit with Best Value Notice
The Government's issued the Tees Valley Combined Authority with a formal notice to make improvements - because of concerns over it's governance and value for taxpayers
Last updated 1st May 2025
The Ben Houchen’s Tees Valley Combined Authority has been told to make improvements after being hit with a ‘best value’ notice by the Government.
The notice is a formal notification of concerns about governance and value for money and requests that the authority engages with the Ministry of Housing, Communities and Local Government to provide “assurance of improvement”.
The TVCA, which has an annual budget worth more than £300m with responsibility for areas such as business growth, transport, and adult education, employment and skills, has been in the process of implementing an action plan to respond to the findings of an independent review published last year.
The review, commissioned by former Levelling Up Secretary Michael Gove found no evidence of alleged corruption or illegality in respect of Teesworks Ltd, the private company attempting to attract investment in the former Redcar steelworks site, a joint venture partnership involving local developers Martin Corney and Chris Musgrave, the mayoral development company the South Tees Development Corporation or TVCA, effectively the umbrella organisation for the former.
But 28 recommendations were made to strengthen governance, legal and administrative frameworks and related bodies in order that value for money for taxpayers is achieved.
It highlighted insufficient detail in board papers and the absence of legal advice on occasions, a lack of political scrutiny and oversight, and “excessive confidentiality”.
TVCA’s external auditor Forvis Mazars previously found “significant weaknesses” in TVCA’s value for money arrangements along with that of STDC, citing the review’s findings and capacity issues in the authority’s finance and risk and assurance teams.
In a letter to the Conservative Tees Valley Mayor, Jim McMahon, the Minister of State for Local Government and English Devolution said he recognised the “volume of work” that had been undertaken to develop and implement an action plan and welcomed the establishment of a panel supported by the Local Government Association (LGA) to support and challenge the authority while changes are made.
But he said further assurance was still required.
Mr McMahon wrote: “Specifically, I require assurance of how your action plan will be implemented and embedded over time, to ensure it has the necessary impact on governance, culture and relationships.
“To provide me with that assurance and to secure continuous improvement, I am issuing your authority with a Best Value Notice.
“We believe this to be proportionate and forward looking.
“In summary, the notice requests that your authority engages regularly with the department; provides us with a clear and cohesive strategy for improvement across all the recommendations given to your authority, which includes milestones and measures of impact; and strengthens the capacity, scope and role of the external LGA panel.”
‘Shadow of uncertainty’
He added: “The residents of Tees Valley cannot afford to live under a shadow of uncertainty for any longer, and investment in the region demands full confidence from both the public and the private sector.
“I hope that this process will offer the opportunity for a reset, providing the foundations for future investment into the area oriented towards the public good, underpinned by good governance, transparency, and accountability.
“Authorities must demonstrate robust financial management, effective decision-making, and meaningful engagement with communities to uphold Best Value principles.”
The notice issued said that a “clear, overarching and holistic improvement plan” needed to be agreed by officers and members of the authority, which covers Darlington, Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton, within three months.
It suggested the decision could have “implications” for so-called enhanced mayoral strategic authority status – essentially the granting of further devolved powers – but the best value notice represented the “Government’s commitment to the future success of the authority”.
It said: “We are committed to removing barriers to growth in the region and will continue to work closely with you to rebuild confidence, so that the authority can continue its journey towards further devolution.”
The notice will be reviewed in a year’s time, while, depending on progress made, it can either be withdrawn or escalated, based on the evidence provided.
Teesworks has received hundreds of millions of pounds in public funding with questions being raised over procurement processes.
Having previously been a 50-50 public-private partnership, It is 90% privately owned after a deal in 2021 transferred 40 per cent of shares from the STDC to companies owned by Mr Corney and Mr Musgrave.
Thousands of jobs are predicted to flow from the site as a result of various projects, including the SeAH wind turbine factory and Net Zero Teesside, a gas fired plant with carbon capture storage facilities.
A TVCA spokesperson said it would work constructively with the Government throughout the process being undertaken.
The spokesperson said: “We remain absolutely confident in the value we deliver for local people every single day — thousands of good jobs, rising wages, billions in private investment, and major global companies now setting up on Teesside.”
TVCA is the not the first authority in the region to be handed a best value notice – the same notice was issued to Middlesbrough Council in 2023 with evidence being requested of the “capacity to transform at pace”, although the status was later lifted following improvements.
There have been calls over recent years for an investigation from public spending watchdog the National Audit Office (NAO) into Teesworks. But Mr Houchen said in a statement he’d been told the NAO would no longer be investigating as a result of the Government’s intervention.
He said: “I’ve always said I’ll put politics to one side and work constructively with the Government and the Prime Minister to secure jobs, investment and opportunity for our region. That remains my complete and only focus. No organisation is perfect and my fellow Labour council leaders and I must reflect on this as the Combined Authority improves.
“But let’s not lose sight of what really matters: thousands of good-quality jobs, billions in private investment, and global companies choosing Teesside as their home. That’s the ‘best value’ we’re delivering for local people every single day.”