The Government will open an investigation into accusations of wrongdoing at the UK’s largest freeport.
Communities Secretary Michael Gove confirmed he will establish an independent review into the Teesworks project in the north east of England.
Mr Gove confirmed the probe in a letter to the Conservative mayor for the Tees Valley, Ben Houchen, who shared the correspondence on Twitter on Wednesday.
But Mr Gove opted instead to commission an independent review led by a panel the Government will appoint.
In the letter shared by Mr Houchen, the Cabinet minister wrote: “I have considered calls for such an investigation to be led by the National Audit Office.
“It is not, however, the NAO’s role to audit or examine individual local government bodies and its powers would not normally be used for that purpose.
“I do not think it would be appropriate to expand so significantly the role of the NAO by asking them to lead this inquiry.”
He added: “Given the importance to you and to Teesside of addressing this matter, I have taken the exceptional decision to support the commissioning of an independent review to consider the specific allegations made and the Tees Valley Combined Authority’s oversight of the STDC (South Tees Development Corporation) and Teesworks joint venture.
“As set out above, this is not because I am advised that there is evidence to recommend such a review, but to answer your request of May 16. I will appoint a panel, in line with established practice, to undertake an independent external assurance review.
“Since serious allegations of corruption, wrongdoing and illegality have been made, I will ask the panel to address these accusations directly and to report on the governance arrangements at STDC, including how decisions are made, as well as looking at the value achieved for the investment of public money on the site.”
Mr Gove said local MPs will be among those invited to give evidence to the panel once it is established.
Mr Houchen welcomed the investigation, tweeting: “I feel that an independent review is necessary to show investors, businesses and local people that there is no corruption, wrongdoing or illegality in what has become and continues to be an incredible project for jobs and investment in our region.
“I look forward to the outcome and will be making no further comment until the independent review has been completed, so to allow the independent body to carry out their work without influence or favour.
“My officers stand ready to provide any and all information requested by the independent review.”
Prime Minister Rishi Sunak earlier sparked confusion in the Commons by saying the investigation had been announced.
At the start of Prime Minister’s Questions, Sharon Hodgson, Labour MP for Washington and Sunderland West, asked: “Does the Prime Minister agree with his friend the Tees Valley mayor that the National Audit Office must investigate the Teesworks affair?”
Mr Sunak said: “The Levelling Up Secretary (Mr Gove) has already announced an investigation into this matter.
“But what I would say, it is just the same old Labour.
“All we get, after years of neglect, it is the Conservatives that are delivering for Teesside.”
Labour MP for Middlesbrough Andy McDonald later called for clarity, suggesting parliamentarians were “in the dark” about whether the investigation had been launched as he raised a point of order on the matter.
The Teesworks freeport is aimed at regenerating a 4,500-acre site, which once housed the Teesside Steelworks, and creating new jobs for the region.
Ms Nandy and the Labour chairman of the Commons Business and Trade Committee, Darren Jones, had both called for an NAO investigation into the site, as did Mr Houchen, claiming it would “restore confidence in the professionalism, integrity and objectives of the Government”.
Reacting to the announcement of the investigation, Ms Nandy said: “This is bizarre. The Secretary of State’s letter refers to an organisation that doesn’t yet exist to hide the fact that there has been a complete breakdown in accountability on his watch.
“The National Audit Office has the experience, capacity and independence to carry out an investigation, and Michael Gove has the power to order that investigation. Why, then, is he setting up a review where the terms and members will be chosen by him?
“The Government must not hide from proper scrutiny, and there is no clear justification for not ordering a comprehensive, independent investigation from the NAO.”