What does the Durham Tees Valley Airport deal mean? The move to bring the airport back into public hands explained

A DEAL has been struck on the future Durham Tees Valley Airport '“ but there is still a way to go before it comes back into public hands.

Wednesday, 5th December 2018, 11:54 am
Updated Wednesday, 5th December 2018, 11:55 am
Durham Tees Valley Airport.

The five Labour council leaders of the Tees Valley will have to sign off the agreement secured between Conservative mayor Ben Houchen and Peel.

The metro mayor’s bid to buy back the airport was the cornerstone of his surprise election to office in 2017.

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Mayor Houchen added: “People ask me – why do you want to buy this airport? What’s the point? Is it worth it?

“The answer is yes. It absolutely is. If it’s good enough for the people of Manchester, Newcastle and Cardiff to take a public stake in their airport, so should we.”

Ultimately, the final decision will come down to how council leaders vote at the Tees Valley Combined Authority cabinet in January .

WHAT’S THE AIM OF THE PLAN?

Mayor Houchen claimed the airport “already pumps more than £50m a year” into the Tees Valley economy and said the numbers “would rise” in future under the new airport deal. 

He said the focus now was on “getting this over the line”.

“We need to make sure that the five local authorities ratify that deal – otherwise it is dead in the water,”added Mayor Houchen.

“This is not just about the airport. A lot of people said it’s a vanity project and some sort of gimmick to get elected but actually when you get into the detail of this, this is about driving our economy.

“The airport is one of two drivers that is going create mass employment and mass investment – it’s the airport and it’s the South Tees Development Corporation.”

ARE OPERATORS INTERESTED?

Airport negotiations between Peel and the TCVA were subject to a non-disclosure agreement (NDA) until this deal was done.

But a separate NDA between the combined authority and an established UK airport operator is still in place.

When it came to investors, Mayor Houchen said things were “moving quickly”.

“There are other NDAs in place we continue to explore but that will all become very clear and transparent in the coming weeks to make sure people have all the information to hand,” he added.

“It’s one thing acquiring an airport but we need to have a turnaround plan so before any decision is made, that will be made open, transparent and public.”

After the conference, the mayor was still tight lipped.

Mayor Houchen said: “We have an NDA in place with a couple of operators in taking on the running of this airport.

“Now we have got this deal in place with Peel we can finalise the negotiations.”

He said the new masterplan would be drawn up in the coming weeks.

HOW MUCH IS IT?

Mayor Houchen told an assembly of politicians and business leaders the £40m deal would amount to “about 6%” of the £513m given to the Tees Valley Combined Authority (TVCA) by central government until 2023.

“What I can say is that we will be spending more on trains than we will be on planes. And rightly so,” he added.

The mayor announced the deal would be published in full and would be “completely open, honest and transparent throughout”.

And he also added It would stop the 350 homes development on airport land, would “secure the long term future of the airport” and wouldn’t cost taxpayers an extra penny.

“You will not have to pay a penny extra to finance this acquisition,” he said. 

“Our valued public services will not be affected by this deal. Our councils will be completely insulated from this deal.

“The housing will be stopped.”

After the meeting, Mayor Houchen said there would be no council tax rises.

WHAT IS THE ‘FALLBACK OPTION’ IF THINGS GO WRONG?

Stockton North MP, Alex Cunningham, sounded a warning in parliament of the airport closing in 2021 last month.

And Mayor Houchen called on it to make a point that his was the “only suitable plan”.

He added: “His (Mr Cunningham’s) belief is I need to deliver on my plan or the airport will close.

“Not the words I would use, but what I am clear on is this is really the only plan for the long term sustainable future of our airport.”

Robert Hough, chairman of Peel Airports, said it had been “very tough” at times since it took over in 2003.

Passenger numbers have fallen by more than 700,000.

Mayor Houchen said he was “100% confident” the deal would succeed – but revealed there was a “plan B fallback option”.

He added: “Let’s say for the cynics out there say the airport was going to close in five years’ time and the plan does not work – we’ve got a plan for the worst case scenario.

“It’s £35m for 819 acres of land plus £5m for the housing – which already has planning permission for 350 houses.

“It would be owned wholly by the local authorities and it would be up to the local authorities to give planning permission on that site.”

And the mayor suggested an industrial park, mixed use park, or even some housing were options if things didn’t work.

He added: “If the airport was closed and wasn’t viable any more there is more residual value in that land than what we’re spending on it.”

“Those numbers will be made public – in the worst case scenario and if it does not work, that is a positive number rather than just recovering some of the losses.

“But I do not believe the worst case scenario will happen.”

WILL THE NAME CHANGE?

Mayor Houchen has signalled his intentions to change the name of the airport back to Teesside Airport if and when it is brought back into public hands.

But a question from the floor of Tuesday didn’t bring a concrete answer one way or the other.

Mayor Houchen said: “It’s still to be decided. We’re still just celebrating the fact we have reached a deal with Peel.

“In due course all of our plans for the airport will be made public – keep an eye out over the next few weeks leading up to the cabinet.”

REACTION

Mayor Houchen said he’d be publishing a “convincing case” for taking back control of the airport “very soon”.

However, not everyone was convinced by Mayor Houchen’s arguments so far.

Labour leaders from up and down the Tees Valley shared their misgivings about the plan  ahead of the announcement with worries public money would be put at risk.

In the wake of the deal, Mr Cunningham said: “The mayor has made repeated statements saying his deal to buy the loss making airport won’t cost council taxpayers a penny – yet he is prepared to use the cash, hard won by our combined authority even before he was elected, to fund it.

“Whatever way you look at it – that is taxpayers’ money.”

The Labour MP urged “independent examination” of the business case and the figures of the proposal and called for a “cast iron guarantee” from the Mayor – and any business partners he is working with – that taxpayers would not be “saddled with the bill”.

And he also believed he would not be able to buy the airport “without diverting tens of millions of pounds of public money”.

Mr Cunningham added: “Instead he should work with the combined authority to develop and support other ways in which more airlines can be encouraged to provide services from DTVA.”