Controversy surrounding the Teesworks development has impacted jobs and investment in the region, leading business figures have claimed.

The publication of the report yesterday evening (January 29) found "no evidence of corruption" at the former Redcar steelworks site but did criticise the governance and transparency issues of the project.

Tees Valley Mayor Ben Houchen has described the allegations as "the biggest bit of sabotage that has ever happened on Teesside", just as Middlesbrough's Labour MP Andy McDonald argued that it was the "most damning" report he had ever read.

The development scheme, one of Europe’s biggest brownfield regeneration sites, was subject to an inquiry by three senior local authority officers, ordered by Levelling Up Secretary Michael Gove.

It included 28 recommendations that encourage strengthening governance, transparency and oversight.

Siobhan McArdle, the chair of the Tees Valley Business Board, said it was "frustrating" that the controversy had impacted "investor confidence and therefore further job creation".

She said: "The Tees Valley Business Board welcomes the findings of the report and is pleased to see that the STDC Board intends to address the issues of governance and transparency, at pace.

"We have a once-in-a-generation opportunity to build on the fantastic foundations that have been laid, across Tees Valley, over the past seven years. The Business Board remains focused on driving inclusive economic growth and accessible opportunity for all.

"In addition to strategic oversight, our role is one of business engagement and representation, and it is important to state that the regeneration of the Tees Valley, and the far-reaching opportunities this provides across our business community, is far wider than Teesworks, and it is frustrating to see the impact the ongoing nature of this review has had on inward investor confidence and therefore further job creation.

"To this end we would ask that our local politicians now engage responsibly with the findings of this review and support the implementation of its recommendations, rather than continue the political narrative that is unfairly damaging to Tees Valley, our business community and our people."

Lord Houchen summarised the scale of 'repair work' he felt he had to do now that the report has been published.

He said: "All of the last year we have been focused on this. We have not had a government visit for over a year.

"We haven't signed a new deal on Teesworks since it started."

Yesterday, Lord Houchen confirmed that he intended to work on the improvements the report suggested.

He added: "We have seen a year's loss of jobs and investment because of these untrue allegations.

"It's horrific. There are also the unknowns of all the investors who never got in touch.

"Some will get back in touch over the next three to five months.

"If I was an investor, I would never have looked at Teesside while an investigation was ongoing. 

"People won't have spoken to us because of it. It's the biggest bit of sabotage that has ever happened on Teesside."

The issue first became national news when Andy McDonald raised serious allegations of "industrial-scale corruption" about the project in the House of Commons.

He believes that this report backs up his claims and is calling for another investigation, this time carried out by the National Audit Office.

Mr McDonald said: "This report is by a country mile the most damning thing I have ever read of a public body and how it conducts its affairs.

"It is nearly 100 pages of criticism after criticism after criticism for the way Lord Houchen of High Leven, the Tees Valley Combined Authority and the Teesworks joint venture have conducted business with our money and the authors even say “in the time available to the panel we have not been able to pursue all lines of evidence or examine all transactions”.

"That is why we now need the National Audit Office to do just that.

"The report identifies that there is no risk on the business people while they have made money hand over fist and that they have essentially got Lord Houchen over a barrel.

"Beyond that it shows that all this has been going on without effective scrutiny, openness, transparency, conflict of interests ignored, lack of audit trails, questions over subsidy control breaches and it just goes on and on.

"It also shows that in respect of the joint venture partners on Teesworks that ‘none of the standard checks relating to proof and source of funds, credit rating and money laundering were carried out’.

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"Ultimately the panel concluded that the ‘systems of governance and finance in place within TVCA and STDC at present do not include the expected sufficiency of transparency and oversight across the system to evidence value for money’.

"If this isn’t all bad enough, it appears that Lord Houchen, the TVCA and the Teesworks joint venture businessmen partners think this is a good day at the office and some kind of successful outcome.

"That is an appalling response and once again underlines why we need the National Audit Office to come in and pursue all lines of evidence and transactions in a way the panel could not."