Taxpayers expect and deserve well-functioning local and combined authorities which provide essential statutory services for local residents. This Government’s manifesto committed to rebuilding local government and handing control back to local leaders. To achieve this, we must get the basics right and ensure local and regional government is fit, legal and decent. Government will continue to work directly with a small number of authorities in difficulty as a responsible steward for the sector, and this should be done in a way that is based on genuine partnership to secure improvements.
Today, I would like to update the House on the steps we are taking in relation to the Tees Valley combined authority. The people of Tees Valley must have confidence that every penny of their money is being spent appropriately and today’s announcement is about ensuring that is the case.
In May 2023, the previous Government commissioned an independent review to consider the specific allegations made and Tees Valley combined authority’s oversight of the South Tees Development Corporation and Teesworks joint venture. This review was published in January 2024.
In February 2024, the Tees Valley combined authority Mayor, Lord Houchen, responded to this review. His response was published on gov.uk. The then Secretary of State, the right hon. Michael Gove, requested a further update on progress in six months’ time and my Department received this update in September 2024. The authority’s auditors then published reports covering financial year 2023-24, which identified significant weaknesses in value for money arrangements, meaning auditors declined to sign off accounts.
After having carefully considered the relevant evidence, my Department has today issued the authority with a best value notice.
This notice is not a statutory intervention. It is a formal notification that the Department has concerns regarding the authority and requests that the authority engages with the Department to provide assurance of improvement. The Department expects authorities that have been issued with a best value notice to continue leading their own improvement. I note that the Tees Valley combined authority is already supported by an independent assurance panel established with the Local Government Association. I encourage the authority to make full use of the panel’s expertise and guidance and to strengthen its role in day-to-day operations, and will be looking to the panel for updates on the authority’s progress.
We are committed to removing barriers to growth in the region, as well as supporting the development of new industries and creating new jobs in the region. That is why this Government have confirmed the allocation of up to £21.7 billion of funding over 25 years for net zero clusters in Teesside and Merseyside, and why we are finalising development of the Tees Valley investment zone. This notice today is about rebuilding trust in the combined authority after a long period of uncertainty, so that it can continue its journey towards deeper devolution.