A new inquiry into the Teesworks site has been ordered by the government – but concerns are being raised about the powers the probe will have.

Levelling Up Secretary Michael Gove has written to the Conservative mayor of the Tees Valley, Ben Houchen, to say that he will “appoint a panel, in line with established practice, to undertake an independent, external assurance review”.

This comes following allegations of “corruption” – including from Labour MPs – at the site of the former Redcar Steelworks, which is being redeveloped into a freeport.

It had been expected that a statutory National Audit Office (NAO) inquiry would be instructed, but this has not materialised.

A spokesman for the NAO said: “In discussions with government officials last week, the NAO indicated that it was willing and able to carry out an examination of the South Tees Development Corporation and the redevelopment of Teesside Steelworks, if the necessary agreement was in place.

“The government has decided to make alternative arrangements for looking into these matters, as is its prerogative.”

In his letter, Mr Gove said: “I have considered calls for such an investigation to be led by the NAO.

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“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. Nonetheless, I would welcome the NAO updating its review of government’s funding arrangements for STDC.”

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Mr Houchen said: “I welcome the government agreeing to my request for an independent review into the Teesworks project, including the involvement of the NAO.”

He added: “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.”

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