CROYDON IN CRISIS: Thurrock, in Essex, gave our own council a two-year head start in the bankruptcy stakes, but now they are taking the kind of action which was recommended here long ago.
By our Town Hall reporter, KEN LEE
The news that a former £140,000 per year official is to be investigated by their professional body over their part in crashing their council’s finances will be widely welcomed by residents.
But it will be the residents of Thurrock, another council with £1billion in toxic borrowings, who have received the encouraging indication of progress in dealing with the causes and culprits for its bankruptcy, not those people with the misfortune to be served by Croydon Council.
Sean Clark was the finance director at the Conservative-controlled council in Essex for more than a decade, until his departure in April 2023. He is now to be investigated for misconduct by the Financial Reporting Council, which is the regulatory body for Britain’s biggest professional accountancy bodies.
According to a report in The Times, “Clark faces being kicked out of the accounting profession should he be found guilty of misconduct, meaning he will never be able to work as an accountant again.”
Mayfair meetings: Sean Clark authorised millions of pounds in ‘investments’ on solar farms
Thurrock Council issued its Section 114 notice in December 2022 – more than two years after Croydon had taken a similar administrative procedure to signal that it could not balance its books.
Indeed, by the time Thurrock was effectively declaring itself bankrupt, Croydon had issued its third S114 notice.
And despite having received in February 2021 an official report – the Penn Report – that recommended that Croydon should submit formal complaints about the conduct of four specified officials for their part in the council’s financial meltdown, the borough’s chief executive, Katherine Kerswell, has yet to do take that action.
But it is that kind of action that is now being pursued over Clark’s questionable handling of Thurrock’s finances with the FRC.
Clark and Thurrock earned their notoriety after funnelling massive amounts of public money towards private businesses for investments, mostly in solar farms.
Clark was suspended from his job in September 2022, three months before the council’s S114.
No controls: the scandal at Thurrock, as uncovered by the Bureau of Investigative Journalism
“Over the preceding five years he used loans from the Treasury and other local authorities to plough more than £1billion into businesses including solar farms and loans firms,” according to The Times.
And investigation by the Bureau of Investigative Journalism found that a businessman, Liam Kavanagh, “convinced Thurrock council to hand over the equivalent of almost its entire annual budget while inflating the value of a group of solar farms it had invested in”.
The Bureau obtained financial records that showed the Thurrock money was spent on a country estate, a private jet, luxury yacht and other multi-million-pound purchases, including a £2.3million Bugatti supercar and a million-dollar diamond-encrusted Hublot watch.
The Bureau described it as “potentially the largest fraud ever committed against a UK local authority”.
They reported that Clark, in his role as Thurrock’s chief financial officer, arranged the payments to Kavanagh’s companies in secret and ignored legal concerns with the proposed investment.
Kavanagh held a series of secretive meetings with the council official at a five-star Mayfair hotel (not the usual venue to conduct civic business), and received a commission of £5million on a single £145million solar deal. He has always denied any wrongdoing.
Penned out: one of the recommendations from the Penn Report into Croydon’s financial collapse, identifying former finance chief Richard Simpson. No such complaint to CIPFA has ever been submitted by Croydon
Thurrock is estimated to have lost at least £275million on its investments. The council is now being run by government-appointed officials.
“The FRC will not examine whether the investments were good or bad uses of taxpayers’ cash but rather whether Clark followed the required procedures when making them,” The Times reports.
“The investigation will be the first time the FRC has examined the conduct of a public official. The investigation is expected to last many months, and may not be concluded until next year or beyond.”
But at least such an investigation has got underway there, as Thurrock demonstrates the art of the possible, and the realisation that any delays in cases such as these make obtaining proper resolution increasingly difficult.
In Croydon meanwhile, what has long appeared to have been a cover-up for wrongdoing continues.
Read more: #PennReport: No referrals sent to staff’s professional bodies
Read more: Negrini’s £437,000 pay-off: who is going to pay it back?
Read more: CEO Negrini’s long campaign to shut down Inside Croydon
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ROTTEN BOROUGH AWARDS: In January 2024, Croydon was named among the country’s rottenest boroughs for a SEVENTH successive year in the annual round-up of civic cock-ups in Private Eye magazine
Well done Inside Croydon for reporting this and yet again absolutely scandalous that LB of Croydon have not done what Thurrock rightly have elected to do.
What is Katherine Kerswell doing?
Such inaction is making her culpable in her own right surely?
Right question, wrong person. It’s Mayor Perry who should be pushing action against the people who brought Croydon down. It’s possible that the reason he hasn’t and won’t is because that would mean he’d have to face a few unpleasant truths himself, along with a load of his councillors
If, Arfur, after all this time you still cling to the quaint notion that our elected representatives are running our council, then you really need to pay closer attention
Not running it. Ruining it. more like it.
But to address your point, if it’s the government-imposed stooges that are stopping the wheels of justice from turning, it begs the question, why? Whose interests are being protected? Not yours and mine, that’s for sure
It is good that professional bodies have standards and can hold professionals to account.
But that does not have any bearing on the reality that many administrators of Public bodies have no effective regulation or oversight of their actions as evidenced in Croydon.
That one or a couple of senior level Executives of a public body can borrow into the billions and it not face scrutiny even well after the fact it was wrong discredits the whole administrtive system and public confidence in those administrative organs.
Is it not about time that Public bodies are held publicly accountable to the Public they are in place to serve?
Isn’t it time we ask why Katherine Kerswell should be subject to such investigation by her professional standards body? The never ending inactivity and inertia in taking any form of action against wrong doing has really gone beyond the time frame of good practice, which Kerswell has failed to demonstrate during her tenure in charge of Croydon.
Kerswell doesn’t have a professional body as such. She’s never been a lawyer or an accountant.
She’s entirely in the thrall of the Local Government Association, which recommended her appointment in Croydon, paid the wages of her deputy (Elaine Jackson), put up Richard Penn and funded his report, and where her husband is now a senior consultant.