Agenda item

The Mayor will be in attendance to provide an update on the Middlesbrough Mayoral Development Corporation

RECOMMENDATION: that the Panel determines whether further information is required

The Mayor of Middlesbrough was in attendance to provide information in relation to the proposed Mayoral Development Corporation (MDC) for Middlesbrough.

The Mayor explained that the idea of a Development Corporation was that it was leaner, had more powers, potentially more funding, and could get things done bigger, better and faster.  The Development Corporation for Middlesbrough would focus on the very centre of the town. 

For the entire Tees Valley population of around 7,000 residents, Middlesbrough’s economy was very important and had underperformed its role for many reasons which needed addressing. 

There were very few MDCs in the UK and they were created via an Act of Parliament.  It was expected that the creation of an MDC would attract some national attention and media coverage and put Middlesbrough in a good light and be seen to be taking some positive steps.

It was highlighted that potentially much of the planning control that currently rested with Middlesbrough Council would be transferred to the MDC.  The MDC would be governed by a Board, which the Tees Valley Mayor would Chair, and Middlesbrough’s Mayor would be Vice Chair.  The rest of the Board was yet to be determined but was likely to comprise people with local knowledge, skills and enthusiasm for the area.  The MDC’s planning powers would only cover the central Middlesbrough area.

The Mayor stated that there was no implied criticism of the Council’s planning department but that Councils were required to following process and procedures and that could be a hindrance to getting things done.  The MDC would have the ability to act without being tied up by other procedures.

Potentially the Tees Valley Combined Authority would provide some funding with the aim of attracting further investment and projects.  With greater access to funding it was possible that the MDC could accelerate some of the projects that the Council had been considering for several years.  One example was The Crown.  This was a landmark building that had been a derelict eyesore for a number of years and was located at a gateway to the town.  There was a proposition to revitalise the building but whether that would be financially viable was not yet known.  The MDC, with access to more funding would perhaps have the ability to steer through planning issues more nimbly to make the proposals a reality. 

Where a site was owned by Middlesbrough Council, the Council would work with the MDC to make improvements but it would have to be on the basis of providing good value for the people of Middlesbrough and the town.  Any Council assets that were transferred to the MDC would be negotiated on a case by case basis. 

The Mayor referred to the House of Fraser building in the town centre.  The Council had been fearful of it being left to deteriorate and therefore purchased it.  There was an interesting idea from a local organisation and the MDC might be able to take that project forward.  Since the building was purchased with public money however, it would not be transferred to the MDC free of charge.  The Council would not be handing over assets to the MDC without suitable recompense. The MDC could also work with private owners to create something special in the town.  

The Panel were reminded that Middlesbrough Council had previously transferred its housing assets to a private company.   Middlesbrough Council had also established the Middlesbrough Development Company that worked with private and public sector organisations to deliver new residential and commercial investment.

The Mayor stated that he believed that Central Middlesbrough could, and should, become an extraordinarily vibrant place for the whole region and that having an MDC could make that happen.   The Director of Regeneration agreed with the Mayor’s comments, particularly in relation to the impact that an MDC could make, since the Council’s finances limited what could be done.  However, it was important that the Council received further detail about how the MDC would work and in particular around  planning powers.

Concerns were voiced in relation to scrutiny of the MDC Board and how that might happen.  It was acknowledged that being challenged in public was healthy and an essential process.  The Mayor stated that he was not against the idea in principle, however, the composition of the Board had not yet been decided and a Constitution would also need to be drawn up.  The Panel’s concerns about accountability were noted and that the benefits of a speedier process should not supersede it.

In relation to the potential for compulsory purchase of assets, the Mayor explained that the MDC may be able to force a sale if, for example, a building was holding up a large project.   However, an independent valuation would have to be made of the asset.  The Mayor added that he would not be in favour of forcing the sale of assets unless it was a very big scheme that was being put in jeopardy.

Another concern raised was the lack of detail available in relation to funding at the current time. An initial figure of £10 million from Central Government had been suggested.  The Mayor agreed that more detail was needed and confirmed that Middlesbrough Council was not being asked to commit any resources to the MDC.   

A query was raised in relation to business rates and whether some of the MDC’s clawback could be re-allocated to Middlesbrough Council for specific projects.  The money raised from business rates would be split 50% to Middlesbrough Council and 50% to the MDC, rather than 50% to Central Government.  Whilst Middlesbrough Council would continue to retain 50% for its general budget, it was unlikely that the MDC would re-allocate any of its share to the Council as it would more likely be used as leverage against future borrowing.   However if businesses moved into new buildings built by the MDC, that would in turn provide additional income to the Council from business rates.

Discussion took place regarding enterprise zones and the potential for business rate reductions that might be applied to entice businesses into the MDC area, thus leaving vacant properties in other parts of the town.  It was clarified that the current enterprise zones had strict criteria applied in terms of offering discounted business rates.  Only businesses moving from outside of the area would qualify and there were other stipulations in relation to job creation.

The current timescale for implementation of the MDC was that it would be in place by late November, however the expectation was that it probably would not be up and running until early next year.  Whilst Middlesbrough Council was involved in consultations, the Tees Valley Combined Authority was leading on the MDC creation.  Regular meetings were taking place that involved Middlesbrough’s  Mayor and Chief Executive but at the current time there were no detailed proposals to share with Members.  Once proposals were drawn up, Middlesbrough Councillors would be briefed on the details.  A full Council vote would only be needed on the proposals if there was a significant financial implication for Middlesbrough.

AGREED as follows:

1.  the information provided was received and noted.

2.  a map of the MDC area would be provided to all Panel Members.