Renegotiations, transport and Teesside Airport: What was discussed at TVCA meeting
It may have been the unanimous agreement of cabinet to back the response to the Tees Valley Review recommendations that grabbed headlines last week, but so much more happened at TVCA’s cabinet meeting.
Representatives from the Overview and Scrutiny committee as well as the Audit and Governance committee were invited to give comments on behalf of their committees ahead of cabinet approving the response to the Tees Valley Review recommendations for the Teesworks site. The review made 28 recommendations to make improvements after a panel criticised governance, decisions, transparency and finance, though it found no evidence to support allegations of corruption or illegality.
Councillor Steve Nelson, chair of the TVCA Overview and Scrutiny committee provided feedback for cabinet to consider before they gave Tees Valley Mayor Ben Houchen the green light to respond to Government. He said: “In relation to the report for the Centre for Governance and Scrutiny, the committee acknowledged an improved working relationship between members and officers. ”
READ MORE: Response to Tees Valley review recommendations agreed to 'form basis of new governance structure'
The Stockton councillor went on to say that “The committee did however express disappointment that a response from the joint venture partners had not been provided in time for the committee meeting.” At a subsequent informal committee meeting, a number of members “expressed concern at the number and nature of the proposed concessions from the JV partners, but with others thinking it represented a good deal.”
Councillor Nicky Walker, provided feedback to cabinet on behalf of the TVCA Audit and Governance Committee. She requested that “an action plan is to be presented to the committee to enable it to assess the level of progress against each of the recommendations to identify whether further action is needed.”
She echoed Councillor Nelson’s disappointment that the response from the joint venture (JV) partners had not been provided in time for the committee meeting.
The letter both councillors referred to was sent by private developers Martin Corney and Chris Musgrave, who hold a 90% stake in the Teesworks site, to Group Chief Executive Julie Gilhespie, on September 17. They were responding to recommendation 22 of the Teesworks review which states that: "STDC should explore opportunities to influence when and how land is drawn down and developed and if possible, renegotiate a better settlement for taxpayers under the JV agreement."
The businessmen assert that “The return to the private sector partners is a fraction of that to the public sector partners. This site is at a very early stage of development and this public sector return will only further increase over the next several years. We therefore see no reason to vary the JV agreement insofar as changing the settlement terms.”
Mr Musgrave and Mr Corney did offer some variations to the joint venture agreements, for example: “The current option period (to draw down land on any part of the site) is 30 years, expiring 2050”. They proposed a potential 15 year option period from the present day, which would end in 2039, 11 years earlier than initially proposed, meaning they would have less time to drawn down parts of the site.
This response was noted in the Report of the Chief Executive that was presented to cabinet on Friday, September 27. The Business Board also engaged with the Tees Valley Review. Siobhan McArdle, chair of the Business Board, made comments on the report, discussing the negatives that ensue as a result of adverse media coverage.
Ms. McArdle went on to say: “Very much the Business Board’s attitude now is we will continue to be briefed… and making sure we can do everything possible to support the drive of benefits".
Labour Middlesbrough Mayor Chris Cooke was unhappy with some of the processes that had occurred throughout the period of curating a response to the Tees Valley Review, as reported on previously. The Middlesbrough Mayor also attempted, unsuccessfully, to remove Lord Houchen’s mayoral veto that he held at cabinet.
The attempt was slapped down by the Tees Valley Mayor during an exchange where he laughed at the suggestion, who said “the idea that you flagged that as trying to be more democratic is just farcical.”
Away from the Tees Valley Review, there was a transport update which was underlined by uncertainty that will only be answered by the Budget, that is due to take place a month from today on October 30. Mayor Houchen explained he had a meeting with the Secretary of State approximately a month ago.
During this meeting, he was told that the billion pounds that had been allocated to the area was now under review and how he hoped this would be clarified in the Budget. Mayor Cooke put forward the importance of the Transporter Bridge when it came to allocating money to different projects and asked what would be the process for prioritisation.
The Tees Valley Mayor responded: “If the government comes back and reduces our funding, then we would have to bring the whole transport programme back to cabinet for reconsideration.”
Towards the end of the meeting, it was mentioned that questions from the public, put to the TVCA cabinet, have also been answered. Multiple questions asked in relation to the Mayor’s Update surrounded last month's financial results from Teesside Airport. The airport's EBITDA (Earnings before interest, taxes, depreciation, and amortization) profits were celebrated in August, with managing director Phil Forster describing it as a "monumental achievement", despite a £3m operating loss.
One of the public questions was: “Does TVCA as majority shareholder consider TIAL [Teesside International Airport Limited] to have made profit in 2023/24?” The response was that “Teesside International Airport has recorded a positive EBITDA of £308,555 for 2023/24 subject to audit.”
A follow up question was “Will The Mayor correct the inaccurate statement that TIAL made a profit in the year to March 2024, as no reasonable person would declare a profit without taking into account borrowing costs?” The response given was to refer to the previous answer that outlined the positive EBITDA results.
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