§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]10.30 pm
§ Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East)
I am grateful for the opportunity of this short debate. One of the flagships of the so-called Thatcher revolution was the creation of the urban development corporations. They were designed to re-create the industrial strength and vitality of Britain's manufacturing heartland and to recast the nation's self-image along impeccably Thatcherite lines.
Now, 10 years on, we can see that they were, if anything, what could be called Potemkin flagships—a glossy and frequently imposing facade hiding a history of often inappropriate and threadbare achievement. The picture is becoming apparent only now, as those bodies come to the end of their lives and the reality of audit and actual achievement are laid bare.
I have asked for the debate because the urban development corporation covering my area, Teesside, is coming to the end of its life. Many of us are concerned that there are skeletons in the cupboard of the Teesside development corporation—skeletons of possible liabilities and possible problems for our local authorities and the residuary body. We must calm those fears or take action to deal with the problems.
Among a number of damning reports that have been made public in the past year were the findings of the National Audit Office when it investigated the affairs of the now defunct Bristol and Leeds UDCs. In both cases the National Audit Office found serious problems: in the case of Leeds, problems with land deals in the Kirkstall area that led to accusations of double standards and murky behaviour on the part of individuals in the Leeds UDC; in the case of Bristol, problems relating to standards of infrastructure provision, the late processing of compulsory purchase orders, bad record keeping and cost monitoring and a bill to the then Department of the Environment for £4.9 million to clear up the mess.
As a result of that debacle, the National Audit Office submitted a report dated 28 February last year to the House of Commons and the then Secretary of State for the Environment in which it recommended a number of actions that it considered essential in all future wind-ups of UDCs.
The NAO recommended, in summary, that all UDCs should provide the Department of the Environment, Transport and the Regions with a risk assessment examining the likelihood of winding-up tasks not being completed and identifying strategies for the management of outstanding tasks; that all existing UDCs should ensure that document storage and retrieval systems are of a high standard, that files should not be destroyed and that after wind-up reliable records should be available for the location of every file; and that UDCs should consult widely on future regeneration proposals and pay more attention to the transfer of knowledge on the development opportunities of each site.
I mention those recommendations because they are central to my concerns about the present situation in regard to the winding up of what has been called Mrs. Thatcher's favourite UDC, the Teesside urban development corporation.
460 The TDC is, in terms of the land that it covers, the largest of the urban development corporations. In its decade of existence, it has sponsored many schemes and it has certainly made its mark locally through its lavish advertising and public relations budget. I do not want to be entirely negative about the TDC and the projects that it has sponsored. Some projects, such as the one that set up the joint university college of Teesside and Durham universities at a site in Stockton and the creation of the Hartlepool marina have been welcomed in Hartlepool, Stockton and elsewhere on Teesside.
However, once the PR hype and the trumpet fanfares ceased to echo, other schemes failed to emerge or were highly controversial and faced opposition. In that context, I cite three developments. The first is the massive Teesside Park out-of-town shopping centre. It was vigorously opposed by the local authorities at the time and has had to be countered by the use of state funds through city challenge to safeguard high street shopping in Stockton.
Secondly, plans for a massive hypermarket on the old Middlesbrough dockside—which created much hostility among planners, a neighbouring local authority and other town center retailers—have now been called in by my right hon. Friend the Deputy Prime Minister. Prior to the call-in, the promotion of the scheme at the planning stage was so badly handled by the TDC that a successful appeal to the High Court found that the corporation was, in the words of Mr. Justice Sedley, guilty ofa pervasive departure from the requirement of law that a planning authority must evaluate an application objectively, and without prejudgment of its merits.Referring to the fact that he would have to direct the TDC to reassess the application, Mr. Justice Sedley said:if it were a bench of justices that had erred, I would direct that the decision be taken by a fresh bench.Mr. Justice Sedley regretted that that was not possible in this context.
Thirdly, it is widely known in the region that the TDC was unwilling or unable to produce a full business plan to support Millennium Commission funding for a proposed tall ships centre for the Middlesbrough docks area. That has led to considerable delays to a scheme that has much public support.
It is a well-known fact of life on Teesside that the TDC and particularly the corporation's chief executive, Duncan Hall, are difficult to deal with. It is also a well-known fact that many Teesside local authorities, both past and present, have found it difficult to work constructively with the TDC. It is well known in the corridors of power and in the Teesside business community that it is difficult to achieve joint working with the corporation unless it is on its terms. It is well known among the local media that it is well nigh impossible to obtain detailed information from the TDC—indeed, a regional Sunday newspaper recently described the TDC as a "secretive" body.
I must inform the House that there is an almost complete lack of confidence on Teesside in the Teesside development corporation's willingness to achieve, or interest in achieving, a wind-up in the spirit of the advice from the National Audit Office. The secrecy of the corporation is also giving rise to fears among local authorities on Teesside that many cash liabilities may be hidden in the woodwork. Those liabilities may become apparent only long after the corporation has been consigned to its grave and the present 461 massive PR campaign is long forgotten. I would like to know the cost of the "long goodbye" that we seem to see every half hour on regional television at present.
The National Audit Office argued persuasively that there should be full and wide disclosure of regeneration possibilities with legatee bodies—principally the local authorities of the area that the UDC covers—and the designated residuary body, the revamped Commission for the New Towns. Those arguments have been accepted by the Labour Government—they were also accepted by the previous Government—and they have been incorporated in the advice of the Department of the Environment and that of the Department of the Environment, Transport and the Regions to the urban development corporations. I understand that, unfortunately, to date, there have been only minor discussions with many of the local authorities on Teesside. I understand also that they have been mainly technical, relating to the transfer of planning applications files, planning agreements and details of highway adaptations.
There has been little or no discussion on important issues such as key regeneration matters—issues our local authorities have had to dovetail with their own work. These are issues that I have written about in letters to my hon. Friend the Minister for the Regions, Regeneration and Planning.
The scale of the refusal to deal in a meaningful way with Teesside's local authorities is summed up in a report that went to members of Middlesbrough borough council on 16 December last year. The report, written by the council's chief economic development planning officer, stated:The TDC will not reveal information on current land deals and site development proposals because of client confidentiality, and the Council is therefore not aware of the TDC's intentions.The report adds, astonishingly, that the council's officershave been unable to obtain any detailed information of plans or proposals that may have been drawn up by the TDC for future regeneration as this is being handled exclusively by the TDC's Chief Executive.This is a level of secrecy that smacks more of the inner chambers of a Medici princeling than of a public body set up by statute and spending public money.
The report continues in terms of the council's future policy plan. It states:therefore it is probable that the Tees Corridor Study, being prepared by consultants on behalf of both Middlesbrough and Stockton Councils, and also English Partnerships, will differ from ideas that the TDC might have, and any proposals it may be working up or have implemented by the wide-up date.I am told by senior council officers on Teesside that the secrecy of the TDC on these matters is affecting the ability of our local authorities to bid properly and effectively for European structural fund cash for the preparation of strategic sites for new, or potential, inward investors. That is money that will now go elsewhere.
It could be said that Middlesbrough council has been somewhat lucky in having the TDC talk to it at all. Another local authority body on Teesside, the Tees Valley joint strategy committee—a body set up by statute following the passing of the statutory order for local government reorganisation for Teesside—has been entirely ignored. The JSC is not a local government body of whim. I repeat that it is a creature of statute that is made up of serving 462 councillors from all the boroughs in the former Cleveland area and from Darlington, and it is entrusted with all matters relating to strategic planning issues.
The JSC has been trying to set up meetings with the TDC for over a year now to discuss winding-up matters in the overarching strategic context. It has had its requests constantly and adamantly refused by the TDC's chief executive and no logical reasons given for the refusals.
The need for consultation with the JSC is vital. It is now in the midst of preparations for the drafting of the new Tees Valley structure plan which, to be robust, needs to be based on knowledge of, and insight into, the development proposals of the TDC.
There are other matters that need to be discussed with Teesside's local authorities. Above all, we need from the Department an honest statement on the risk assessment of the TDC projects. I am particularly concerned about completed large infrastructure projects such as the river Tees barrage.
§ Ms Dari Taylor (Stockton, South)
I am most grateful to my hon. Friend for allowing me to intervene. He has mentioned that there has been no exit policy and that we have received no information from the TDC. In my patch, we are left not just with the Tees barrage, where there could be serious maintenance problems, but with the imposition of a scheme that no local person wants in a part of rural Stockton that is beautiful and for which there is lottery money. These are serious problems for local people and they have no recourse; they cannot discuss it because nobody from the TDC will discuss it with them or with the council.
I am most grateful to my hon. Friend for taking these issues on board and for bringing them to the attention of the Government and, I hope, the wider media and people. I thank him for that.
§ Dr. Kumar
My hon. Friend is absolutely right. She just reminded me that the River Tees barrage is in her constituency, but it is nevertheless a Teesside issue. This is a very important issue involving environmental problems that we might encounter, which might need a lot of cash to solve. Local councils need very early notice regarding those problems.
The other issue identified by the National Audit Office is the keeping of accurate audit records and files. Again, there has long been suspicion on Teesside that the standard of record keeping and file systems in the TDC does not meet the National Audit Office's demands.
In the Middlesbrough borough council report to which I referred earlier, the council's chief officer said that although files relating to statutory matters will be kept and handed over, the TDChas indicated that it will destroy files relating to completed or aborted projects".A modern "Bonfire of the Vanities" perhaps. That flies in the face of National Audit Office recommendations and can give rise only to fears that the TDC has something to hide. I have to say that, having regard to, and in view of knowledge of, the history and ethos of the TDC, I share those fears.
The TDC is notoriously secretive. It meets in secret behind closed doors, with no printed public minutes and without any scrutiny of its decision-making process by the 463 local media or by local people. That is contrary to the spirit of the Nolan committee. The TDC announces decisions by way of press releases and often refuses to take part in debates on the merits or otherwise of its schemes—and it is funded by public money. I believe that the House would rightly condemn such behaviour.
In this context, I must mention recent press reports in the regional media that pose questions about successor companies set up by the TDC—companies which, it is said, apparently involved, at a salaried level, prominent figures associated with the existing TDC. I shall pass on these cuttings to my hon. Friend the Minister and ask her to look at them and to make the appropriate inquiries within the Department for which she is responsible.
I wish to put a number of concrete suggestions to my hon. Friend about the winding up of the TDC. There are actions that my hon. Friend can undertake: that the TDC be immediately charged to set up a committee, chaired by the regional government office, comprising the TDC, the Commission for the New Towns, the Tees Valley joint strategy committee and the four boroughs; that it be made clear to the TDC that the committee will operate within the access to information legislation currently applicable to local authorities; that the committee operates to a strict calendar of meetings and that that calendar is adhered to; that the TDC produce for the committee an inventory of all the sites in its ownership, current development proposals, actual and potential private sector partners and potential prospects for development by 31 March; that the TDC produce for the committee a list of all projects that will not be finished by the end of March this year and proposals for their funding; and that the TDC produce for the committee a list of liabilities, a programme for the transfer of liability and proposals for the amelioration of the total weight of the potential debt burden. I also ask that the TDC produce a complete list of files concerning key sites with information on ground conditions, means of access, financial evaluation and financial proposals. [Interruption.]
I will leave it at that. I could go on, but I want to hear what the Minister has to say.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle)
I congratulate my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) on securing the debate, and on the way in which he presented the issues that concern him and his constituents. In the nine minutes left to me, I shall do my best to give him at least some reassurance.
As my hon. Friend knows, we are coming to the end of an era with the development corporations. We are now concerned with their wind-up processes and exit strategies. Urban development corporations were established by the last Administration, and I remember the considerable resentment that accompanied their establishment, particularly in local government. Some councils felt that they were being excluded from the process of regeneration, and in some cases they were portrayed as being hostile to regeneration. Although the development corporations were expected to work with the local authorities in their areas, I accept that practice varied across the country. Some were better than others at working in partnership with local government. Of course, most of that is now history, or fast becoming so.
464 The Government recently set out their vision for economic development and regeneration in the English regions—which we have just been debating—and we hope that that will provide a better framework for the regeneration programmes that we hope to see in place by October this year.
Before I deal with the specific issues raised by my hon. Friend, let me say something about the Teesside development corporation. When it was established in May 1987, it was the largest of the urban development corporations, covering an area of more than 4,500 hectares. Its aim was the regeneration of that area, and it was given substantial public funds for the purpose. The public money was used to "lever in" private-sector investment on Teesside, focused on specific projects. We now take that approach for granted, but, at the time, given the problems that existed in the urban development areas, it was a novel approach.
As my hon. Friend has acknowledged, some of the developments that have been sponsored by the Teesside development corporation have been welcomed by the people and the local authorities on Teesside. It would be pointless to deny that the development corporation has achieved a significant transformation of its area, and brought considerable benefits to Teesside—not least over £1 billion of new investment.
The position was different in 1987. Teesside was experiencing decline in all four of the principal industrial sectors on which the local economy and local employment depended. Many people recognised at the time that those sectors—iron and steel, chemicals, heavy engineering and the port—needed to change, either through growth or through restructuring; but they recognised that the change could not take place overnight. More important, they recognised that new investment had to be attracted to Teesside, either in similar or associated businesses or in entirely new businesses.
Decline of the traditional industries on Teesside was not the only problem. Teesside was not seen as a place in which to invest. In 1987, it was seen as a centre of industrial decline, severe environmental dereliction and an unduly heavy concentration on what were seen as "bad neighbours"—industries such as steel and chemicals. Creating a new image for Teesside was the priority for the development corporation. There was a need to break from the past, and to be at the forefront of environmental change, improvement and rehabilitation. There is no doubt that Teesside development corporation approached the task with enthusiasm and skill. It felt the need to be bold and imaginative, and it is not surprising that, in the process, some feathers were ruffled.
I must say to my hon. Friend that I would have preferred there to be less tension; but, as I have said, development corporations will soon be a thing of the past, and I look forward to more effective partnerships as the new regional development agencies are established.
As a result of the corporation's activities, an unprecedented amount of private-sector investment has been attracted to Teesside. Much has been achieved in the last 10 years to transform what were some of the worst areas, and few today would deny that their perception of Teesside has changed. In particular, I would mention the new marina and historic quay at Hartlepool, the Teesside site between Middlesbrough and Stockton-on-Tees that is now the location for new business, housing and education 465 development, the Teesside Park retail and leisure development at the former Stockton race course site, the new business park at Preston Farm and the developments on the River Tees itself, including the offshore base and the Tees barrage.
Of course, it has not all been plain sailing, and not everything the corporation has tried to do has been successful. My hon. Friend referred to the planning application for a major retail development at the Middlehaven site that has been called in by the Secretary of State. We are both aware of what the High Court said about the way in which the corporation handled the application. For obvious reasons, I cannot say anything about the application. We shall have to wait for the outcome of the public inquiry.
My hon. Friend mentioned the Teesside Park retail development. I think that it is going too far to suggest that it was the only reason for the Stockton city challenge bid for funds. At that time, Stockton had many other problems that the city challenge bid identified for urgent action, and the developments then being undertaken by the corporation made those problems more obvious. He may recall that the bid submitted to my Department included the Teesside development corporation as one of the partners.
I should now like to turn to the specific issues that my hon. Friend raised about the wind-up of Teesside development corporation. On the general issue of exit strategy, my Department has given guidance to all development corporations on how they should wind up their affairs. That guidance has taken account of the recommendations made by the National Audit Office in its report on the wind-up of the Leeds and Bristol development corporations. Each corporation is responsible for preparing its own exit strategy, and for consulting as necessary with the appropriate Government office, local authorities and others.
The main task now falling to Teesside development corporation is the disposal of its remaining land holdings and other assets to public and private sector organisations, to enable further development to take place and to continue the momentum of regeneration. The corporation is quite properly talking to individual local authorities on Teesside about their taking over certain infrastructure projects. However, I am surprised that, unlike other development corporations, Teesside development corporation has decided not to enter into any agreements with the local authorities on Teesside for them to take on packages of assets and liabilities. The guidance given by my Department does not dictate succession strategies, but it is concerned that all available options should be considered. Development corporations are encouraged to discuss their succession arrangements with local authorities and with English Partnerships, as they are ready-made vehicles for continuing regeneration work.
I am concerned that the local authorities on Teesside feel that the corporation has not considered it necessary to discuss its strategy in detail with them. I can understand why that approach has not been well received by either the authorities or by my hon. Friend, and I would have liked to see wider discussions than those that have so far taken place.
466 In line with the guidance that my Department has given, the corporation has identified all the assets and liabilities that must be disposed of by 31 March, and has prepared detailed risk assessments. While I understand my hon. Friend's concern that this information is not in the public domain, I am sure that he will appreciate that it often includes commercially confidential, and therefore private, information. However I can assure him that it is available, to my Department and is being carefully monitored by my officials in the Government office for the north-east. Regular meetings are held with the corporation's officers, and I can assure him that action is taken when it is required.
My hon. Friend will know that the Secretary of State has power to give directions to development corporations, and although rarely used, the power is available if required. The exit plans prepared by the corporation form the basis for discussions with the Commission for New Towns, which is the designated residuary body that will inherit any assets and liabilities not disposed of by 31 March. I assure my hon. Friend that there is no question of the local authorities on Teesside receiving any liabilities that they have not agreed to take on before 1 April. Any of the corporation's liabilities that have not been disposed of by the end of March will automatically transfer to the Commission for New Towns.
My hon. Friend has raised the issue of the destruction of files by the corporation, which implies that essential records will not be available to successor bodies or to the National Audit Office. The Minister for the Regions, Regeneration and Planning has recently written to him on that specific issue. My Department's advice is that development corporations are not required to retain all their files: it recognises that corporations will have accumulated many thousands of them. However, it advises that they should be cautious about destroying files unless they are sure that they will not be of future use. We expect all corporations to err on the side of caution in that respect.
I have no reason to believe that Teesside development corporation is not following departmental guidance on these matters. If it does have any doubts about whether a file or other records should be retained or destroyed, it knows that my Department's staff in the Government office for the north-east are always available to advise.
I have listened carefully to the suggestions made by my hon. Friend about the wind-up of the corporation. As I have said, officials in the Government office for the north-east are already closely monitoring the exit plans. I am willing to stay in touch with him on the development of that process.
I know that my hon. Friend is concerned about the future of regeneration on Teesside once the development corporation is wound up. He has referred to concerns expressed by at least one of the local authorities. One of the tasks that my Department has given to all development corporations as they approach the end of their lives is the preparation of a regeneration statement, which will help inform future policy.
I hope that I have given my hon. Friend some of the reassurances that he sought.
§ Question put and agreed to.
§ Adjourned accordingly at Eleven o'clock.