A MOVE to borrow future funds lined up for the Tees Valley Combined Authority is being considered ahead of a crunch vote on Durham Tees Valley Airport – or Teesside International Airport as it is set to once more become.

Council leaders of the five Tees Valley authorities and Tees Valley Mayor Ben Houchen will meet on January 24 to decide whether to back the £40m deal to buy back the airport and adjoining 819 acres of land from majority owners Peel.

In the meantime, questions have been raised about where the money will come from for the project and the full business case.

Mr Houchen has vowed every shred of information will be free to see on the airport business plan, its valuation and the turnaround proposal.

He has warned the airport will close in 2021 if the deal is not agreed and has vowed it would not have an impact on bills for taxpayers.

Redcar and Cleveland Council leader Sue Jeffrey has called for “tests” on the deal to work out whether it is commercially viable, affordable and deliverable. The mayor believes the deal is all three.

The combined authority has a “single pot” of funding of £95m remaining up to 2023, according to its medium term financial plan.

On top of that is the £75m the TVCA received last year through the Transforming Cities Fund – £45m of which has gone into building business cases for revamps of Middlesbrough and Darlington railway stations.


Other combined authorities have drawn down on the single pot of money they have been pledged for the next 30 years.

The £15m a year is fixed and will not change – so its value today will almost certainly be worth less come 2030.

Now the TVCA is looking at this move to help pay for long term projects such as the airport.

The combined authority would use its new borrowing powers introduced in the Autumn budget to pay back the money.

Mr Houchen says: “You are basically drawing down against the money government has committed to give you over 30 years – it’s not as if it’s risky borrowing we might not be able to repay."


Extra money from the UK “Shared Prosperity Fund” in the Spring has also been pencilled in to replace EU funding  – something the TVCA has forecast to bring in £30m to 2023 and £120m up to 2029 to the TVCA.

The TVCA is also assuming the Local Growth Fund – which has allocated £103m to it so far – will be extended at current levels for the next ten years, to add another £40m up to 2023 and £160m up to 2029. But neither of these are set in stone yet.

A spokesman for the mayor’s office says: “The government has a duty to keep supporting areas like ours and they will do that and we believe this is the chosen mechanism to do that.

“So we make some assumptions based on what we’ve had previously, therefore, there will be some surprise funds.”


When it comes to borrowing against future funds, Cllr Jeffrey says she could understand the logic behind the borrowing idea – but believes it is about ensuring the best return on the money.

She adds: “Is the airport the best return? I don’t know. An airport is great and there is no doubt it gives us opportunities but will it bring the right sort of economic growth so that everyone benefits from it? I’ve not had an answer to this question yet."


Senior TVCA figures have urged caution over current figures – estimating the combined authority will be spending £1bn in the next ten years with “new income streams” expected.

When it comes to the airport, Mr Houchen says the finances would cover the cost of buying it and the “worst case scenario” for supporting its capital and operational expenditure for ten years.

Mr Houchen adds: “In a worst case scenario it all goes wrong and you can still afford everything else and, by the way, the valuation shows you’re going to get more money for the land that you would have got than spending all that money on it.”

Losses of £2m a year were touted by Labour council leaders ahead of Mr Houchen’s announcement about buying the airport back.

Cllr Jeffrey says: “They reckon what they know now will be affordable but what will be the demands on that cash in 15 years time?”

Cllr Jeffrey said the Shared Prosperity Fund to replace European funding was still out for consultation which presented more uncertainty.


The new operator touted for the airport is understood to be the Stobart Group, which runs Carlisle Airport and London Southend Airport.

Councillors, council leaders and business leaders on the Tees Valley Local Enterprise Partnership (LEP) heard from staff of the unconfirmed operator before Christmas.

Cllr Norma Stephenson, chair of the TVCA overview and scrutiny committee, was pleased with what she’d heard from the meeting.

Cllr Jeffrey says she has listened to many private firms talk about projects in the Tees Valley in the past couple of years and was impressed by their ambition.

But she still awaits more details.

Mr Houchen says all the plans would be seen ahead of the January 24 vote. 

He adds: “While public ownership guarantees the airport’s long-term future, nobody is suggesting I’m better at running an airport than Peel – because I’m not.

“I don’t know the first thing about running an airport terminal – but I know a team who do.”