Agenda item

A report of the Director of Regeneration was presented to provide the Committee with an overview of the governance process for the proposed Mayoral Development Corporation and the next steps in the process.

The Tees Valley Mayor and Middlesbrough Mayor had announced an ambition for a Mayoral Development Corporation (MDC).  The aim of a MDC was to accelerate major regeneration initiatives, in a defined area/scope, by dedicating specialist capacity, securing additional investment and streamlining processes.

The establishment of a Mayoral Development Corporation was a power available to devolved, city-region authorities under the Localism Act 2011, albeit a case must be made to the relevant Secretary of State and formal approval must be granted.

To commence the process for a Mayoral Development Corporation was a unilateral decision available to the Tees Valley Mayor - Members of Middlesbrough Council were not able to determine whether a MDC could be established or not.  However, as the Host Authority, Middlesbrough Council was a principal statutory stakeholder and would have great influence on how the MDC’s Constitution was shaped and to what extent any assets could be pooled/transferred.

The initial stages of the process to create a Mayoral Development Corporation had commenced but this amounted to an initial expression of interest/formal letter to the Secretary of State, to commence the process. This was informed by a provisional consultation held over June/July 2022. This only established the ambition to establish an MDC and the proposed area (red line boundary) within which the MDC’s powers/influence would apply.

Upon receipt of the request, the Secretary of State would commence a detailed statutory consultation exercise to involve major stakeholders. Middlesbrough Council, as host authority, would be the principal statutory consultee in this exercise. This would provide the opportunity to express any governance, democratic, accountability and financial concerns to inform the establishment of an agreed Constitution for any MDC structure.

The process would involve detailed discussion and engagement with Elected Members.  It was important to stress that the process was in the very early stages and many of the logistical factors and required financial appraisals could only be detailed once the scope of the Secretary of State’s consultation was known.  This was not to obfuscate the process, or material concerns of Elected Members, rather it was recognition that this was the start of a collaborative process and any potential impacts could only be assessed as details of any framework, came forward.

Middlesbrough Council’s initial thinking was based on the fundamental

requirements that:

a) should any financial assets be proposed to be pooled within an MDC, this could not prejudice Middlesbrough Council’s financial position and would need to be protected/compensated accordingly.

b) the Constitution of the MDC and any proposed transfer of powers, should properly reflect/protect the democratic mandate of Middlesbrough’s Elected Members and the primacy of local powers, strategic objectives and adopted plans.

Details of specific proposals, development sites, investments were not known in any detail at this stage.  When specifics were known, each factor would be assessed for implications and offered for Member consideration. This was likely to inform the conditions, protections, and covenants which the Council would highlight as a response to the next stage (Secretary of State – Statutory Consultation).   However, some frequently asked questions and responses were included at paragraphs 11 to 20 of the submitted report.

A Member raised concern in relation to the removal of planning powers from the Council.  Reference was also made to information obtained through Freedom of Information requests (FOIs) in relation to planning and the benefits of having an MDC.   The Officer explained that whilst the MDC could take control of planning powers, it could also delegate back to the Local Authority, as many of those powers as it wanted to.  However, it was emphasised that as there was no proposal as yet, the implications were not clear.  Officers had been informed however, that the MDC would be bound by the same planning legislation as the Council.   Whilst the Officer could not comment on the FOIs, it was clarified that the Council had not agreed to transfer any assets at this point in time.  An MDC would enable the Council to conclude deals and investments that it did not have the financial capacity to deliver.

It was highlighted that Middlesbrough Council had a good working relationship with the Tees Valley Combined Authority (TVCA) which had enabled several economic development priorities, such as Tees Advanced Manufacturing Park (TAMP), the dock bridge, Boho and Centre Square to be completed, without the need for an MDC.  The Officer explained that the Council was probably close to exhausting opportunities to be able to develop such projects as finances were now much tighter. 

With regard to any possible financial detriment to the Council, the issue of business rates income was raised.   Currently, the Government received 50% and Middlesbrough Council received 50% of business rates income.  However, under the MDC, the Government’s 50% could potentially be reinvested locally so the Council would ultimately benefit.  Negotiations around asset transfer would be complex and as yet there was no clarity. 

Concern was also raised regarding accountability and ensuring that local people were represented on the MDC Board.  The Officers agreed that this issue had been articulated by Elected Members in several different forums and had been noted.  This point would be raised as part of the consultation feedback.  

The Chair thanked the Officers for attending and for sharing the information available at the current time. 

AGREED that the information provided was received and noted.