The airport is said to be being propped up using public funds, amidst calls for the funding to be cut on the clearly 'loss making' failed business venture.....
30th December 2024
Tees Valley Mayor Ben Houchen is said to be facing mounting criticism, following the revelation of continued financial losses being generated at Teesside International Airport, a business which is said to be subsidised by local taxpayers through the Tees Valley Combined Authority (TVCA).
The situation is said to be raising serious questions about how much longer the public should be expected to shoulder the burden of a business that has persistently failed to turn a profit since it was brought back into public ownership & previously hailed as one of Mr Houchen's flagship development for Teesside.
The airport, purchased from Peel Holdings back in 2019 for £40 million pounds, was heralded by Mayor Houchen as a cornerstone of Teesside's regeneration efforts. He promised the venture would stem its losses and eventually deliver upon financial returns. However, these claims have yet to materialise, with the airport continuing to record substantial operating deficits. Since its acquisition by the Tees Valley Combined Authority, its claimed a staggering £34.6 million was earmarked for operational losses and capital investment over a ten-year period. In 2022, that figure was then reportedly increased by an additional £20 million pounds, where its claimed according to the most recent accounts published to companies house, operating losses for the airport now stand at £6.6 million pounds, fuelling concerns about the sustainability of the venture and its long term cost to the local taxpayer.
Total Debt Soars to Concerning Levels
Loans drawn down by the TVCA to sustain the airport reportedly now total an eye-watering £89.6 million, sparking fears that the project has become a major financial black hole. Critics argue the funds funnelled into what some have called a "Houchen's Mickey Mouse business venture" could have been better allocated to improving infrastructure, public services, and delivering upon more jobs & economic growth across the Tees Valley.
These revelations come at a politically precarious time for Mayor Houchen. Following the 2024 General Election, in which the Conservatives suffered huge losses across Teesside, and a number of Conservative held local councils returning to control of the Labour Party with scrutiny of the Mayor' high-profile projects said to be 'intensifying' as question over other projects being propped up using public funds start to come under the spotlight.
A History of Losses and Public Subsidy
Teesside Airport’s financial struggles are not new. Before its purchase by the TVCA, its claimed the airport faced years of declining passenger numbers under private ownership. Since becoming a publicly owned asset, its challenges have only deepened. Despite promises of profitability from the Teesside Mayor, the airport has struggled to attract airlines, passengers, or any significant new business, with critics arguing that even with public investment, the airport's location and competition from larger regional airports make profitability 'a very unlikely prospect'.
The Broader Context: Taxpayer Concerns
The airport’s financial difficulties are said to be compounded by questions about the broader spending priorities of the TVCA. Critics contend that large sums of public money are being directed into projects, often with very uncertain outcomes, many of which are benefiting private corporations rather than that of the wider community. The Teesside Freeport and other large-scale developments under the TVCA’s purview have also recently come under fire for their alleged 'lack of transparency' and tangible benefits to the region. With many labour representatives and local activists calling for external audits to ensure these projects remain both transparent & return value for money to the local tax payer.
What’s Next for Teesside Airport?
The ongoing losses raise fundamental questions about the long-term viability of Teesside Airport as a publicly funded enterprise. Calls for external intervention and an independent review of the airport’s finances are said to be growing ever louder, where its claimed many are beginning to ask whether it's time to revisit the decision to buy the airport and whether alternative strategies, such as re-privatisation or restructuring, could in turn, offer a better outcome for taxpayers.
For Mayor Houchen, the airport's continued struggles represent a significant political headache. As public confidence in the project wanes, he now faces the daunting task of defending a business venture that's increasingly looking to be a very costly mistake.
Auditors have also previously raised concerns about the financial oversight and governance within the Tees Valley Combined Authority, which oversees the airport's funding. Reports published in local newspapers highlighted issues such as a lack of transparency, insufficient financial scrutiny, and questions about whether proper due diligence was conducted on large-scale investments. These concerns have only amplified public unease about the airport’s viability and the broader management of taxpayer-funded projects under the TVCA.
With local taxpayers said to be footing the bill for the airport's ongoing deficits, the question remains:
How much longer can the people of Teesside afford to prop up this loss-making venture?