COUNCILS throughout the nation have been revealing how a lot they’re owed by cash-strapped Thurrock Council.
The native authority’s monetary affairs at the moment are being supervised by neighbouring Essex Council after the federal government stepped in because the council imploded beneath the load of its flawed ‘borrow to take a position’ coverage and different monetary and administrative mismanagement.
The shortage of integrity in Thurrock Council’s monetary mismanagement as its senior officers face investigation and the double-speak of main councillors highlighted is outstanding.
For instance, the council’s present finance portfolio holder Cllr Jack Duffin, who has remained tight-lipped whereas occasions round him unfold, is damned by his personal historic quotes.
Cllr Duffin, who was first elected as a UKIP councillor, then switched to the Thurrock Independents earlier than declaring his allegiance to the ruling Conservative group – for which he was rewarded with a hefty enhance in his council allowance – as soon as damned the council’s monetary coverage, significantly the ‘borrowing to take a position coverage’ which he later turned an ardent fan of.
In September 2016 when he was UKIP’s shadow finance portfolio holder Cllr Duffin stated he was “deeply disappointed” with the choice to take a position £15 million in a photo voltaic farm in Swindon and accused the Tories of utilizing Thurrock taxpayers’ money to hike up vitality costs.
He stated: “This investment is deeply unethical. Energy generated in this way is expensive and it is a fact that the ‘green energy’ agenda has pushed millions of working households into fuel poverty.”
“A new fuel poverty grant should be set up in Thurrock in which half these profits will be ring fenced and spent on helping the poorest people harmed by this ill-considered energy policy.”
Later, he utterly turned about face and urged the council to spend hundreds of thousands extra!
Authorities minister Greg Clark stepped in.
Right now (Wednesday, 14 September) he was resulting from current a report back to the council’s cupboard saying its failings within the first quarter of the yr when it had to make use of up greater than 5 million from its quickly depleting reserves simply to pay its payments.
Nonetheless, in step with recommendation and protocol the assembly has been cancelled, maybe to a sigh of aid from accountable councillors.
However, a behind-closed-doors assembly will happen tomorrow when the way forward for its senior officers is to be debated at a common providers committee.
Critics would possibly say the council, regardless of repeated pleas that it believes in transparency, continues to scrub its soiled linen in personal. An imminent full council assembly subsequent Wednesday (21 September) presents a possibility to problem these critics.
One councillor whose identify repeatedly crops up as a steadfast supporter of the scheme to borrow hundreds of thousands is former finance portfolio holder Cllr Shane Hebb.
He stood down from the finance portfolio function in Might, maybe cautious of the storm to return.
However he had been on the forefront of the borrowing coverage for years, and repeatedly instructed the general public, the media and council critics that issues had been advantageous and there was nothing to be involved about.
Way back to 2016, when he was in battle with Cllr Duffin over the Swindon borrowing, he assured residents the longer term was safe and there was nothing to fret about.
He stated individuals in Thurrock may “rest assured we are looking after their money.”
And added: Thurrock is a professional income producing council and that is precisely the kind of venture we need to be concerned
“We will continue to look for similar opportunities and invest when the advice says we will get a good return for residents.”
“Not only are we looking after people’s money, we are also doing our bit to help protect the environment by reducing the amount of carbon produced by burning fossil fuels.”
The Swindon deal was brokered by controversial finance advisor Liam Kavanagh, a person who has soaked up round £138 million in money from Thurrock coffers.
Flamboyant, globe-trotting businessman Mr Kavanagh has been broadly condemned for his monetary juggling acts and was damned by a Excessive Courtroom decide as unreliable and untrustworthy.
The relationshipo between Liam Kavangh and council finance chief Sean Clark has been questionned
Mr Kavanagh’s recommendation and his corporations are flawed. Thurrock remains to be unable to obtain a considerable proportion of the curiosity from its investments linked to Mr Kavanagh’s corporations, with £12.5 million due final February remaining excellent. Tens of hundreds of thousands extra is because of be repaid however that appears extremely unlikely.
The council is reliant on that earnings to steadiness its books – therefore the disaster. It’s believed the council may find yourself shedding £200 million of the £655 million it loaned to Liam Kavanagh’s businesses – roughly the identical as its annual price range.
Cllr Hebb is one other who has stated nothing since information of the council’s predicament was lastly admitted and the federal government stepped in, sparking a welter of publicity and concern.
That concern has unfold to numerous native councils, to whom Thurrock could possibly be in whole debt of as much as £900 million.
Amongst these is Derbyshire County Council and the fund it administers, the Derbyshire Pension Fund.
The county council itself has invested a mixed £30 million in loans to Thurrock, made up of three £10 million tranches all transferred in April and due to supply returns in April 2023.
In the meantime, the Derbyshire Pension Fund, has transferred loans totalling an extra £30 million to Thurrock, with a string of six £5 million loans all through 2022 and one as not too long ago as August 31, with some resulting from mature later this yr and into early 2023.
Thurrock Council’s monetary debacle has not gone unnoticed
Brighton and Hove Metropolis Council is one other that’s owed money that is because of be repaid – round £10 million.
And a minimum of £11 million is owed to different native authorities in Essex. Fort Level is owed £3m, Maldon is owed £2m and Tendring is owed £6m. Moreover, Colchester and Brentwood borough councils have investments in Thurrock Council however haven’t disclosed how a lot.
Nonetheless, regardless of ranges of concern and doable delays in compensation, most councils consider they are going to get their money again – although that’s more likely to be at some cost to Thurrock council tax payers.
A spokesperson for Brighton Council stated: “Councils are ultimately government-backed. This means there is no risk of default. The loans will definitely be repaid.
“We had been conscious once we made the loans that considerations had been expressed about Thurrock’s monetary scenario.
“However, there was no risk that this would have any bearing on them repaying their loans. Even councils in severe financial difficulties always have to repay their loans.”
And a spokesperson for Fort Level stated: “Castle Point Borough Council has lent £3m to Thurrock Council which is repayable in May 2023. This investment is secured on the revenues of Thurrock Council and not on any specific project. “This funding is secured on the revenues of Thurrock Council and never on any particular venture.
“Inter authority loans such as this are secured on the revenue of the borrowing authority and are the most secure form of investment available to Castle Point Borough Council.
“There has by no means been a case the place there was a default on the inter authority, native authority borrowing.”
That may be true. But the reality is that Thurrock will have to borrow the money to pay them back.
Whether they will be able to get the cash they need from the low-rate Public Works Loan Board is a moot point. At one point such a thing would not have been considered by the government but times change and it might be allowed – though undoubtedly it will be with interest that just adds to overall losses.
And if the council has to go to the commercial market – then the costs will be even higher.
Also see:
Call for drastic change: https://thurrock.nub.news/news/local-news/in-the-wake-of-a-calamatous-week-thurrock-labour-leader-calls-for-drastic-change-responsible-councillors-to-quit-and-for-a-new-chief-executive-149450
MP expresses concern over council’s dire place. https://thurrock.nub.news/news/local-news/borough-mp-pitches-into-concern-over-thurrock-councils-dire-financial-position-and-lays-the-blame-largely-at-the-door-of-officer-cohort-149010
Authorities tells of ‘severe allegations’ made towards Thurrock council: https://thurrock.nub.news/news/local-news/government-tells-of-serious-allegations-that-led-to-drastic-action-and-intervention-in-thurrock-councils-financial-affairs-148829
Fobbed off and lied to!: https://thurrock.nub.news/news/local-news/opposition-leader-welcomes-change-but-damns-council-after-he-and-media-were-stonewalled-ignored-falsely-reassured-lied-to-fobbed-off-and-misled-148768
Council chief quits: https://thurrock.nub.news/news/local-news/council-leader-quits-as-mismanagement-and-misreporting-of-its-financial-affairs-is-confirmed-148737
Media get the blame: https://thurrock.nub.news/news/local-news/media-coverage-has-not-helped-council39s-financial-position-says-thurrock39s-financial-guru-who-has-borrowed-hundreds-of-millions
Dodgy seller damned by decide: https://thurrock.nub.news/news/local-news/judge-damns-man-who-handled-hundred-of-millions-of-thurrock-council-cash-and-investments-plus-he-pocketed-5-million-for-his-dodgy-dealing-council-says-it-is-39carefully-considering39-the-matter
Council battles to maintain its secrets and techniques: https://thurrock.nub.news/news/local-news/council-battles-on-to-keep-its-controversial-financial-dealings-a-secret
