The latest shocking revelation in the Thurrock Council saga is that the residents may have to pay over double the maximum legal limit of 4.9% for their council tax. It is the latest in a long line of staggering figures, revelations and twists and turns, which has seen the council fight, and ultimately lose, Freedom of Information Act requests and senior managers resign.
When examining the numbers regarding Thurrock Council’s losses, it is easy to become lost in the scale and magnitude of it all.
The Spotlight team of East Anglia Bylines has reviewed the data published from multiple news sources on the number and size of the short-term loans. We can report that over 161 local authorities, police authorities and fire authorities loaned over £2bn to Thurrock between 2016 and 2022. Money that the council used to help hide a black hole over £500 million in its budget, and to repay earlier loans with the required interest.
The council has recently been in talks to borrow £636 million from the government.
The Conservative-run council has been effectively bankrupt since December when it was forced to issue a Section 114 Notice. Such an order limits the council to spending only on ‘statutory obligations’, so anything but those will need to be cut.
How did it all start?
The first investments that would form the basis of the crisis were made in 2016, when financial brokers used by Warrington Council introduced Thurrock to Rockfire Capital, an investment management company. However, the first pebble that began to tumble and form the avalanche can be traced back to 2010 and the beginning of austerity.
With the new coalition government decreasing funding, there was pressure on local authorities to maximise incomes. Many councils started to charge for services, and some sought greater returns on investment.
Then in 2016 as a result of the Brexit Referendum, grants and funding from the EU were due to come to an end. This resulted in more pressure on finances and is when Thurrock began its reckless path to insolvency. The councils multiple financial gambles are detailed in this excellent article by investigative journalist Gareth Davies (also linked at the end of this article).
Silence and ‘Silenced’
Legislation is clear that every councillor is responsible for the financial control and decision-making of the council they are elected to. Yet in Thurrock, as suspicion grew amongst the Labour opposition and the situation was challenged by the chairs of committees, they were removed from their position as chair. The council would then go on to spend £70k trying to avoid its obligation to respond to a Freedom of Information Act requests from the Bureau of Investigative Journalists in an attempt to prevent anyone knowing the truth about their enormous financial losses.
Senior staff resignations
Yet the wall of silence eventually crumbled and as a result, the Chief Executive, Lyn Carpenter, stepped aside and then resigned in December 2022. The Director of Finance, Sean Clarke, who arranged the deals that led to the debt, resigned on Thursday 19 January. Between stepping back or being suspended Lyn Carpenter was paid over £59k, while Mr Clarke has received over £70k.
No heavy handed enforcement
An extraordinary council meeting on 9 January brought many questions from opposition councillors, with the occasional smattering of applause from the public in frustration and shock at the horrendous situation. In response to a question from Councillor Chris Baker about the apparent lack of oversight, the leader of Thurrock Council, Councillor Mark Coxshall replied, “We should never use heavy handed enforcement”.
Yet in the past the Council had been accused of just that during fraud investigations of people in the borough. The Thurrock Counter Fraud & Investigation Directorate (CFID), when working in partnership with Southend on Sea, were willing to use counter terrorism legislation to investigate cases – for which it is now facing legal action, as well as investigating councillors. Yet its assistant director and head of the CFID, David Kleinberg appears to have been willing to overlook the failings within his own council. This despite financial advisors – and others – repeatedly raising concerns.
Time and inquiries will eventually establish just why Kleinberg did not investigate his boss, the director of finance for Thurrock, Sean Clark. Even if he felt he could not go to the Chief Executive at the time, he could have gone to the senior executives from Thurrock, Southend-on-Sea, and Castle Point councils as well as from South Essex Homes (Southend’s ALMO, or Arm’s Length Management Organisation), who were part of the Joint Services Board that existed to ensure oversight and governance.
The scandal has ensured that the name of Thurrock, and those that failed its residents, will be recorded in history, and infamy, for generations to come. The question is no longer how much it will cost? The question becomes, just how much good money from innocent residents will now need to be thrown after the bad?
More from East Anglia Bylines
Thurrock Borough Council reveals biggest ever Local Authority financial black hole, caused by ruinous business deals.Read more
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