Labour councillors have voted against the establishment of a new body that would bring £18m of investment to Middlesbrough.

The party drove the charge against the mayoral development corporation (MDC) at a crunch meeting on Friday over fears it was a “smash and grab” of £14.7m worth of council assets. Tory Tees Valley Mayor Ben Houchen said Middlesbrough’s residents deserved better than the “negative and bitter Labour politicians who currently represent them.”

The aim of the MDC, which is being spearheaded by the Tees Valley Combined Authority, would be to speed up regeneration in the town centre and Middlehaven. Politicians were asked whether they would endorse the proposals – 12 voted for and 16 (all Labour) voted against. Independent Middlesbrough mayor Andy Preston, who has meant to be presenting the plans, did not attend the meeting on Friday.

Councillors do not have the power to veto the scheme, but the Department for Levelling Up, Housing and Communities could pull the plug due to the lack of support, meaning the outcome of the vote has thrown the plans, that have been months in the making, into a state of uncertainty.

The vote in Middlesbrough comes just 24 hours after Hartlepool councillors unanimously backed the plans. The full approval by the government for an MDC in each of the towns was expected on Monday, February 27, but it’s not known whether that will now be the case in Middlesbrough.

Key concerns for Labour councillors were around a loss of planning powers, the transfer of council assets and the lack of expertise on the MDC board.

As part of the proposals, £18m of investment was lined up for Middlesbrough, including £8m to transform Gresham. Labour councillors argued that the money should be available for the council, regardless of whether an MDC is set up.

They were also concerned about the transfer of assets to the new development body. This includes Broadcasting House Enterprise Centre, the Civic Centre and the former Crown pub, the latter has just been bought by the council for £750k.

Cllr Antony High said: “This is the biggest smash and grab on Middlesbrough Council’s assets since its inception.” While Cllr Chris Cooke, the party’s mayoral candidate for the upcoming elections in May, said the proposals were “morally and ethically wrong.”

Speaking after the meeting, Cllr Alma Hellaoui said the council was being asked to “sell its soul” by giving away the assets. The Labour Group’s deputy leader Cllr Denise Rooney was fearful that the plans could mean a loss of cash for the local authority and it would not able to fund its services.

The council report states that the MDC could generate £4.9m of additional cash for the council per year, nearly 3,000 direct jobs and £287m of investment.

Cllr Matt Storey said: “There have been significant positive changes to the town and that work should continue but it should continue under the auspices of Middlesbrough Borough Council because that is who we are….I do not want to see powers taken away from this place and I do not think we have been given a good enough reason.”

Last week, Mr Houchen held a briefing with members about the proposals, which no one from the Labour Group attended. This was raised by a number of councillors at the meeting. Labour has previously said this was nothing more than a side issue.

Middlesbrough MP Andy McDonald said: “The development corporation board is a wholly undemocratic and unnecessary entity that will not focus and deliver on what is best for Middlesbrough.”

Leader of the Middlesbrough Independent Group Cllr Chris Hobson, who voted for the plans, said: “All the money made by the TVCA will all come back into Middlesbrough, it will all be reinvested.”

A number of politicians, including Cllr Joan McTigue and Cllr Hobson, criticised Labour for its record on transferring assets when the party controlled the local authority. Cllr Barrie Cooper, the executive member for the environment, said Mr Houchen should be given the chance to try and speed up development in the town.

After the meeting, Conservative deputy mayor Cllr Mieka Smiles said: “I am absolutely appalled at the local Labour party for voting against this. I think this is an amazing, one-time opportunity for our town – because that’s what this is all about, not petty party politics.”

Mr Houchen has also spoken out against Labour. He said: “This decision tonight represents politics at its very worst, and the people of Middlesbrough deserve so much more than the negative and bitter Labour politicians who currently represent them.

“We had a plan, that had real money attached, to finally redevelop Middlesbrough town centre. For too long, Middlesbrough has been left behind and our plans would have finally put this right and injected the imagination, money, and delivery that the town desperately needs.”

Also adding his criticism, Conservative Police and Crime Commissioner Steve Turner said he was “appalled and disgusted”  at Labour’s Middlesbrough MP Andy McDonald.

Conservative Middlesbrough South and East Cleveland MP Simon Clarke said: “This is the worst moment for Teesside for years – a casual, stupid act of vandalism that kills plans to redevelop the town centre. And one driven entirely by party politics. It is utterly shameful and enraging and a lost opportunity we will all live to regret.”

The assets that were lined up to be transferred were:

  • 116-space Station Street car park – plans to transform this as part of a new mixed-use employment district, with improved footfall and live/workspaces to create a new community along Station Street.
  • Units under A66 along Wilson Street – an opportunity to improve the arches along Wilson Street to provide an increased sense of safety and increased footfall under the A66.
  • The Crown, the buildings on Linthorpe Road near the former pub, (147, 149, 151) and the 72-space Amber Street car park – plans for a mixed-use development to regenerate the area including student accommodation, leisure uses, business incubation space and car park.
  • Civic Centre – proposals to redevelop the site to increase the mix of uses around the open space.
  • 93-space Buxton Street car park/ 32-space Jurys Inn car park – required to facilitate the development of the Gurney Triangle.
  • Broadcasting House Enterprise Centre/freehold of Sainsbury’s site (Wilson Street) – both provide a gateway development opportunity.
  • Middlesbrough bus station – an opportunity to better integrate a modern transport hub.
  • Middlehaven, Middlesbrough Dock and surrounding land equating to almost 40 acres – plans for St Hilda’s housing development, internationally recognised anchor leisure attraction and mixed-use residential and commercial dockside development that will deliver waterfront living and working.