A mayor in a key UK “Red Wall” electoral battleground has been accused of having an “obvious” conflict of interest due to his ownership of eight properties in an area of northern England that he is tasked with regenerating.
Middlesbrough’s independent mayor Andy Preston owns, either directly or through commercial partnerships, six houses, an office block and a small industrial site within the boundaries of the town’s “mayoral development corporation”.
The MDC is a new body signed off by the government last month that is aimed at fast-tracking development and forms part of its wider “levelling up” agenda to tackle regional inequality.
Preston will sit on the corporation board, which will assume strategic planning powers from the local authority and take over £14.7mn of its assets, as well as £18mn in central government regeneration funding.
Opponents to the creation of the MDC have accused the mayor of having an “obvious” conflict of interest as a result of his property interests. But Preston said his opponents were “bitter” and the allegation was “laughable”.
The Middlesbrough MDC was instigated by Conservative mayor for the wider Tees Valley, Ben Houchen, who will sit on its six-strong board and has appointed its other members, including Preston, a former hedge fund manager.
In the face of opposition from Labour councillors, it was signed off by levelling-up secretary Michael Gove at the end of last month.
Teesside is an electorally significant part of the Red Wall — seats that had traditionally voted Labour but switched to the Conservatives in the 2019 election.
The MDC will assume strategic planning powers across the centre of Middlesbrough and adjacent former docklands. The £14.7mn in council assets that have been earmarked for transfer into the corporation include car parks and industrial land. The government says it will accelerate investment into the post-industrial town.
Middlesbrough’s Labour MP Andy McDonald organised a parliamentary debate on the matter last week, in which he said the creation of the new body was undemocratic and accused Preston of having “vast swaths of land” within the MDC boundaries.
In response, Preston issued a statement saying he did not own “any land in the MDC area”.
However the Financial Times has established that he does own, largely through commercial partnerships including Green Lane Capital (N/E) LLP, the freeholds on eight properties in the MDC footprint, according to the Land Registry.
The mayor’s interests had been declared to the Tees Valley Combined Authority (TVCA), the body of Teesside councils overseen by Houchen.
Preston confirmed that, with his brother, he owns an unspecified number of “small street houses, which we bought about 14 years ago to renovate and let to students” in the zone’s boundaries, as well as a “very low value industrial lock-up” and an office block currently being sold at a loss, but no “land”.
The idea that he was trying to gain financially from his position on the MDC board “would be laughable if it wasn’t so offensive”, he said, calling McDonald “bitter”.
McDonald, who accused the government last week of “gangster politics” in its approach to setting up the MDC, said the new corporation “goes totally against the grain of devolution, democracy and accountability” and “is deeply worrying”.
The 2011 legislation underpinning MDCs states that those making board appointments “must be satisfied that the person will have no financial or other interest likely to affect prejudicially the exercise of the person’s functions as member”.
Middlesbrough council, the TVCA and the government declined to comment.
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