The UK’s accounting watchdog has launched an investigation into an accountant in relation to activities at Thurrock council, the local authority that was left effectively bankrupt following a series of disastrous investments.
The Financial Reporting Council (FRC) did not name the person in question but said the investigation was regarding “compliance with governance, reporting, regulations and professional standards relating to Thurrock Council’s operations and investment activities”. It will cover the five financial years ending in March 2022.
The decision follows years of reporting by the Bureau of Investigative Journalism (TBIJ) into the investment strategy that left Thurrock with a budget gap of nearly £500m, the biggest ever reported by a UK local authority.
Beginning in 2018, the council provided more than half a billion pounds to companies owned by businessman Liam Kavanagh for the purchase of 53 solar farms. TBIJ revealed last year that Kavanagh had cheated the local authority out of as much as £130m and spent the money on a life of luxury.
Kavanagh has denied misleading the council and denied the allegation of fraud.
Thurrock bankruptcy failures
A government-commissioned report published in June 2023 found that the council had failed to recognise the risks of its investments, ignored repeated warnings and then tried to cover up its tracks. It described the story behind Thurrock’s effective bankruptcy as an “extraordinary chain of events”.
Following government intervention, Thurrock’s statutory financial powers were handed to commissioners from Essex county council in September 2022. Michael Gove, the secretary of state for levelling up, housing and communities, also gave Thurrock permission to impose a 10% council tax hike without a local referendum, increasing household bills by hundreds of pounds per year in the middle of a national cost-of-living crisis.
In response to the news of the FRC’s investigation, Conservative councillor and leader of Thurrock council Andrew Jefferies said: “I strongly welcome today’s announcement from the FRC. As a council, we recognise that things went very wrong. Our focus now continues to be on taking the necessary action to put that right.”
This article was originally published by the Bureau of Investigative Journalism, and is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 License.
