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Wednesday, 27 February, 2002, 10:30 GMT
Watchdog critical of 'shambolic' agency
Transporter Bridge, Middlesbrough, freefoto.com
The TDC was set up to revive parts of urban Teesside
A government-backed regeneration agency has been accused of wasting up to 34m of taxpayers money

A report from the National Audit Office found there were serious flaws in the financial management of the Teesside Development Corporation (TDC).

The 72-page report says a 23m black hole was discovered in its accounts when the TDC was wound up in 1998.

The TDC - the largest body of its kind in England - also made operational losses of 11m and committed itself to 34m worth of contracts which it had no authority to seal.

Frank Cook MP
Frank Cook MP has criticised the TDC

Stockton North MP Frank Cook said the report showed "a horrifying catalogue of shambolic financial mismanagement behind the glossy facade" of the Corporation's operations.

Taxpayers in Middlesbrough, Stockton and other parts of Teesside could now be left to pick up the 23m debt.

TDC was one of 12 urban development corporations set up by the then Conservative government in 1987.

It was given the task of reviving a 12,000-acre area of urban decay on Teesside.

'Lasting benefit'

Over the 11 years of its existence, it received government grants totalling 354m, raised 116m from land and property sales and attracted private sector investment of 1.1bn to the area.

More than 12,000 jobs were created and 1,300 acres of derelict land was put back into use.

But in November 2000, three local MPs raised concerns about possible mismanagement of public funds on schemes such as the decontamination of the site of Middlesbrough FC's Riverside Stadium.


This is such a wide-ranging and devastating condemnation of the way the TDC was managed and supervised that it is hard to know where to start

Frank Cook, MP

In the report released on Wednesday, Auditor-General Sir John Bourn said: "The Corporation achieved much of lasting benefit in a difficult area."

But he said his team had found that, far from leaving a claimed surplus of 14.5m to successor body the Commission for New Towns on its winding-up, TDC had in fact left a deficit estimated at 23m.

Some 1.6m had to be paid in compensation to developers after projects did not proceed, while land was sold at 4m less than its true value.

Other transactions resulted in losses of 5.3m, the report found.

'More robust'

Sir John raised concerns that TDC chief executive Duncan Hall often negotiated transactions himself and then presented them as finished deals to the board.

He said: "Governance at the Corporation could have been more robust. Not all board members had a clear understanding of their responsibilities."

Tees Barrage, Stockton-on-Tees
The Tees Barrage, one of the TDC's schemes, eventually cost 18m

In 1996, the Department of Environment was so concerned about the reliability of financial information on the Corporation's cash-flow and commitments that it considered launching an independent external audit, the report said.

But chairman Sir Ronald Norman threatened to resign, prompting the Department to back away for fear of undermining confidence in the Corporation.

Key files on the Corporation's contracts and relations with developers could not be found following the winding-up, the NAO reported.

Heavy responsibility

Mr Cook said: "This is such a wide-ranging and devastating condemnation of the way the TDC was managed and supervised that it is hard to know where to start.

"What is clear is that those at the centre of the organisation, notably the chairman and the chief executive, must bear a heavy responsibility for the woeful lack of financial control and accountability."

Dari Taylor, MP for Stockton South told BBC Radio Cleveland she believed that 10% of the TDC's 354m budget was wasted.

Ms Taylor said: "Why did they [the TDC] operate outside the rules that control and govern public expenditure?

"Why was it the case that they could value land at sometimes significantly less than its regeneration value and why did we end up with a Tees Barrage which finally cost more than 18m?"


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02 Oct 00 | UK
Living for the city
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