Profits triple at Teesworks project after transfer to private developers

Profits at the controversial Teesworks project, a flagship regeneration site in north-east England, tripled last year after private sector companies were handed ownership of much of the scheme.

The latest accounts for Teesworks Ltd, a public-private initiative to redevelop the 2,500 acre former steelworks, show that net profits rose to £54mn in the 12 months to March 2023 after an “exceptional” financial year.

The transfer of the company into majority-private ownership in November 2021 is subject to a government inquiry over value for public money.

The project’s private sector partners and related companies appear to have received tens of millions of pounds in commission and dividends over the last two financial years, according to the accounts.

Teesworks was set up in 2020 on a 50-50 split between a public body overseen by Tees Valley’s Tory mayor Ben Houchen, and companies controlled by local developers Chris Musgrave and Martin Corney.

In November 2021, a further 40 per cent of the company’s shares owned by the public body — the South Tees Development Corporation — were transferred to the developers for zero cash consideration.

STDC has said the move would shift £172mn in future liabilities to the private sector partners. But the transfer prompted concerns about the project’s value to the taxpayer when details emerged. 

An independent government inquiry into the finances and decision-making underpinning the project was ordered in May but has yet to report back. 

Teesworks Ltd’s latest accounts, the first time it has disclosed a full set of financial figures, show that in the year to March net profits more than tripled from £15mn in the prior year.

The company’s performance was “exceptional, having exceeded all major milestones and performance ambitions in terms of land…