1. Introduction 1.1. As part of the devolution deal with government, the Tees Valley Combined Authority is being granted powers to establish locally- accountable Mayoral Development Corporations; the first outside of London. Once parliament has confirmed these powers, the Combined Authority intends to move forward to establish a Development Corporation for the South Tees area. This document consults on this proposal, the precise area to be defined, and the powers which the South Tees Development Corporation would be able to exercise in promoting economic development and business growth within its area. 1.2. This consultation document sets out proposals for the Tees Valley Combined Authority to designate approximately 4,300 acres (1,740 hectare) of land to the south of the River Tees, in the Borough of Redcar and Cleveland, as a Mayoral Development Area, and to then establish a Mayoral Development Corporation to be named the South Tees Development Corporation. 1.3. The area proposed for the South Tees Development Corporation is one site of significant economic opportunity, with access to infrastructure, good transport connections, and a catchment area with a significant skilled workforce. It includes the site of the former SSI steelworks which closed in October 2015, as well as other industrial assets, many of which are successfully operating in a competitive international environment. The area benefits from river access and includes part of Teesport, the third largest port in the country. 1.4. The closure of the SSI steelworks, and the need for an integrated approach to the infrastructure and assets over the wider site, requires significant management and oversight. It is envisaged that the establishment of the South Tees Development Corporation will further the economic development and regeneration of the area and deliver the physical, economic, social and environmental regeneration of the South Tees area. It is proposed that the Development Corporation takes on the responsibility for managing the former steelworks site, with funding from central government to ensure its continued safety and security and for developing a plan to bring the site and other under-utilised land in the area back into economic use. 1.5. Mayoral Development Corporations can draw on a wide range of powers, covering infrastructure, financial incentives, regeneration, and land acquisition. This document seeks views on how these proposed powers should be established, with appropriate checks and balances, and oversight on their use. Page 2 of 14 2. Background 2.1. Following the signing of the Tees Valley Devolution Deal in October 2015 by government and local leaders, the Tees Valley Combined Authority was established in April 2016 to drive forward the economic development of the Tees Valley: consisting of the local authority areas of Darlington, Hartlepool, Middlesbrough, Redcar & Cleveland, and Stockton on Tees. A key commitment of the Devolution Deal was that Tees Valley Combined Authority would be given the authority to create new Mayoral Development Corporations within its area. 2.2. In February 2016, local leaders and the government announced their intention to apply the proposed powers to create a Development Corporation for the South Tees area. This announcement was part of the area‟s response to the closure of the SSI Steelworks, and was part of a wider strategy to drive forward growth and investment, create jobs and support local communities. 2.3. To immediately start this work a Shadow Development Corporation Board was created, chaired by Cllr Sue Jeffrey, the Leader of Redcar and Cleveland Council, and including leaders from the other four Tees Valley Councils and additional expertise from the the business community. In addition the South Tees Site Company has been established to ensure the safety and security of the site. A Chief Executive has been recruited to help manage the SSI steelworks site and to support the Shadow Board to shape the future vision for the South Tees Area. It is anticipated that the work of the site company would become integrated within the role of the Development Corporation when it is established, whilst continuing to be funded by government. 2.4. In addition, in June 2016, Lord Heseltine published his independent report „Tees Valley:Opportunity Unlimited‟, which reiterated the need to establish a South Tees Development Corporation as quickly as possible. 2.5. It is important to stress that designation of the area of a Development Corporation does not mean any determinant to other areas; either within the immediate area, or elsewhere across the Tees Valley. A legitimate criticism of previous development corporations is that they created successful development within their boundary, some of which was at the expense of economic activity in neighbouring areas. By embedding the South Tees Development Corporation within the Tees Valley Combined Authority, with significant checks and balances in place, the risk of displacement from other areas is significantly reduced. For example, it is not intended that the South Tees Development Corporation would create its own inward investment function, but instead work as part of the Page 3 of 14 successful arrangements already in place through the Tees Valley Combined Authority, to provide inward investors with an overview of all the opportunities available in the Tees Valley; including, but not limited to, the South Tees area. 2.6. The proposed area of the South Tees Development Corporation includes sites which are formerly owned by SSI, and have therefore been under the management of the Official Receiver. The Tees Valley Combined Authority and the Development Corporation may at a future date be able to consider their own role in the ownership and management of these assets and liabilities. In considering options for the future, the Tees Valley will need to ensure the additional costs and risks can be effectively managed, which will in turn require financial agreements which are not yet in place. It is therefore important to stress that the creation of the South Tees Development Corporation does not in itself trigger any transfer of land that may carry with it substantial financial costs and risk to the Tees Valley. 3. Legislative Background 3.1. The Local Democracy, Economic Development and Construction Act 2009 allows the Secretary of State to give powers that are already held by another public body to a Combined Authority. 3.2. Following a proposal put to him by the Tees Valley under the devolution deal, the Secretary of State intends to use the 2009 Act to give the Tees Valley Combined Authority equivalent powers already given to the Mayor of London in the Localism Act 2011, to create Mayoral Development Corporations. The Tees Valley Combined Authority (Functions) Order 2017 will be introduced to parliament to devolve this power. It is the first time this power has been devolved outside Greater London. 3.3. Once these regulations are in place, the Tees Valley Combined Authority will have a legislative basis to designate a Mayoral Development Area, and to create Mayoral Development Corporation with regeneration powers over that designated area. Once the Combined Authority has consulted on these powers, and confirmed its approval, the Mayoral Development Corporation would then be created by a further Order made by the Secretary of State. Page 4 of 14 3.4. The Localism Act 2011 describes the powers granted to all Mayoral Development Corporations to assist them in achieving their purpose. It also requires Tees Valley Combined Authority to consult on the principle of designating a Mayoral Development Area and of establishing a Mayoral Development Corporation, and which of the various powers should apply within that area. 3.5. The power to establish Mayoral Development Corporations will be exercised by the Tees Valley Mayor, with the agreement of the Tees Valley Combined Authority which he/she will chair. Mayoral elections will be held on 4th May 2017. To allow progress to be made before the elected Mayor is in place, interim transitional provisions allow the current Chair of the Combined Authority to exercise that function until the Mayor is in place. Arrangements for Overview and Scrutiny of that decision are also set out in the legislation. 3.6. The responses to this consultation will be taken into account when the final decision is made in relation to the area, powers and functions of the proposed South Tees Development Corporation. The Combined Authority expects the decision to be taken in Spring 2017, and therefore will conclude this consultation on 10th March 2017. 4. Objectives of the Mayoral Development Corporation 4.1. The following objectives are proposed for the South Tees Development Corporation: To further the economic development and regeneration of the South Tees area, so that it becomes a major contributor to the Tees Valley economy and the delivery of the Tees Valley‟s Strategic Economic Plan; To attract private sector investment and secure new, additional, good quality jobs, accessible to the people of the Tees Valley; To transform and improve the working environment of the area so that it is good quality, safe environment, and provides good conditions for the workforce and wider community; and To contribute to the delivery of the UK‟s Industrial Strategy, by supporting the growth of internationally competitive industries with access to global markets. Page 5 of 14 5. Purpose of this Consultation 5.1. The purpose of this consultation document is to review and consider the objectives, powers, structure and boundary of the proposed Development Corporation. It forms part of the statutory requirements for establishing a Mayoral Development Corporation. This minimum requirement is to consult with designated statutory consultees, but the Combined Authority proposes a wider consultation with all organisations likely to be directly affected. The consultation will also be publicly available for anyone who has views or interests to respond. 5.2.