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Monday, April 22, 2024

Overcoming corruption concerns: Teesworks project commits to thorough overhaul and governance review

Gary Macdonald said there were 'obviously things we can learn' and 'best practice' would be considered, but gave no indication of further timescales

The finance director overseeing the Teesworks industrial project has pledged a “thorough, comprehensive job” in tackling the numerous recommendations contained in an independent report into corruption claims.

A review panel set up by Levelling Up Secretary Michael Gove recently found no evidence of corruption or illegality in respect of the massive regeneration project after concerns were raised in Parliament by Middlesbrough MP Andy McDonald over the involvement of private sector developers.

Levelling Up Secretary Michael Gove Image: Wikipedia

But it said expected standards were not being met when it came to managing public funds and deemed that current systems of governance and finance do not provide sufficient transparency and oversight to evidence value for money to taxpayers.

Twenty eight recommendations were made in the report with Tees Valley Mayor Ben Houchen having to set out by 8 March initially how his Tees Valley Combined Authority (TVCA) intends to respond.

Describing the process Gary Macdonald, group director of finance and resources, said: “We want to do a thorough, comprehensive job.”

Tees Valley Mayor Ben Houchen Image: LDRS

John Baker, an independent member of the audit and governance committee at the South Tees Development Corporation (STDC), which is tasked with regenerating the former Redcar steelworks – now Teesworks – site, said: “It’s not a five minute job is it, once the letter goes out it is going to be a fairly extensive programme no doubt.

“As part of that letter will there be a timeline in terms of what we expect to achieve?”

Mr Macdonald described an “implementation phase”, but gave no indication as to when any actions could be completed.

Answering further questions from committee members at a meeting, the finance director said: “As part of the process we will consider any best practices out there.

“I would imagine we would be expected to take account of any learnings or any other elements with a view to enhancing any processes.”

Gary Macdonald, Group Director of Finance and Resources at Tees Valley Combined Authority. Image: LDRS

He said he was seeking the committee’s feedback on the content of the independent report, adding: “What we cover here is a significant regeneration project.

“From our perspective we think we have done a very good job with it, but there are obviously things we can learn.

“If there is anything out there that can enhance what we do, then we are open to that.”

A report by Mr Macdonald for the committee said TVCA was establishing a cross-authority working group, including representatives from all five Tees Valley councils, specifically chief executives, monitoring officers and section 151 officers, to consider and approve a response to the report’s recommendations.

The response to the Secretary of State’s letter would confirm the initial approach to the recommendations with a “comprehensive review” taking place thereafter.

Recommended actions would be submitted to the TVCA cabinet annual general meeting later this year, along with audit and governance committees of the STDC and TVCA and TVCA’s overview and scrutiny committee for consideration.

‘Unhappy with the suggestion’

Meanwhile, published minutes from a STDC audit and governance committee meeting in August last year have highlighted tension over its external auditor Mazars not yet signing off audit work for accounts covering the 2021/22 period as it was awaiting the outcome of the independent report.

A representative from the firm said this was “prudent”, although it was also stated Mazars found no issues in relation to value for money and that the audit work was substantially complete.

Committee members asked it be noted that they were unhappy with the suggestion that the accounts could not be completed until the outcome of the review was known.

A TVCA officer also stated that there was no legislative reason for Mazars not signing off the accounts as the review was independent.

Mr Macdonald’s report said: “The Tees Valley Review report is publicly available and is also currently being reviewed by external auditors to inform their audit completion work for the 2021/22 financial year.”

After the report was released Tees Valley Mayor Mr Houchen said: “The investigation was thorough, wide-ranging, and detailed.

“It assessed more than 1,400 documents, tens of thousands of pages of material and conducted 45 interviews and I’d like to thank the panel for their hard work and diligence.

“I welcome the recommendations of the panel and my team and I are already working to review the recommendations to improve our processes and procedures in line with the report’s findings.”

STDC also said in a statement that it would “work at pace” to review governance and make any necessary changes.

It said the report acknowledged “key successes” on the Teesworks project so far including an estimated 9,000 jobs set to be created, 450 acres of land remediated or in remediation and potential business rates income of £1.3bn.

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