Any suspicion that the Establishment that controls local and national government doesn’t want the public to find out about the shady deals that go on in Town Halls up and down the land will have been confirmed with the news that a Tory minister has blocked calls for a public inquiry into one of the worst bankruptcies ever seen at a local authority.
And in doing so, also denying an opportunity to present vital evidence to show the damage done to local government in this country by 14 years of Tory austerity.
The council in Essex collapsed into insolvency in December 2022 – just days after Croydon issued the first of its Section 114 notices, an official admission that it is unable to balance its budget.
Like Croydon, the residents of Thurrock are today burdened with a mountain of toxic debt, around £1.5billion.
Whitehall appointee: Katherine Kerswell
And like Croydon, no one has ever been held to account for the financial meltdown in Thurrock.
It is now three years since the Penn Report, the initial investigation into Croydon’s financial collapse, was delivered to the borough’s chief exec, Katherine Kerswell. But Kerswell, originally a Whitehall-appointee, suppressed the findings of that report for more than two years, and to this day most of the report author’s recommendations remain unactioned.
In Thurrock, elements of the financial crash there are now subject to legal proceedings, after the council last month made a commercial fraud claim in the High Court against businessman Liam Kavanagh and his company, Rockfire Capital.
Kavanagh has denied misleading the council and denied the allegation of fraud.
While Croydon Council poured £200million into the blackhole that was building company Brick by Brick, from 2018, Thurrock Council provided more than half a billion pounds to companies owned by Kavanagh for the purchase of 53 solar farms.
Businessman: Liam Kavanagh
Thurrock is also now subject to an investigation by the Financial Reporting Council, the accounting watchdog, regarding “compliance with governance, reporting, regulations and professional standards relating to Thurrock Council’s operations and investment activities”. It will cover five financial years ending in March 2022.
Thurrock’s High Court case and the FRC probe may yet shed further light on how such massive sums of public money were handed over for ill-considered private investment schemes. Despite the work on the Penn Report and other submissions from Croydon’s external auditors, no such full and proper public accountability seems likely for those who bankrupted Croydon.
And there is more than a sense of the Conservative Government wanting to pull the curtains closed on the scandal at Tory-controlled Thurrock, after last night’s announcement from local government minister Simon Hoare.
According to the Financial Times this morning, Hoare’s block of the public inquiry will forestall “a potential wider probe into systemic failures in oversight and funding of local authorities across England”. Because no one wants that. Well, not those in charge of England’s rottenest boroughs.
Blockage: Simon Hoare, local government minister
“For a variety of reasons, including reckless commercial strategies and diminished spending power, these councils have been forced to ration services and raise local taxes by exceptional amounts after failing to balance their budgets,” the FT reported, citing Croydon as a (bad) example.
But Hoare has written to Thurrock Council refusing the public inquiry, and saying that Michael Gove’s Levelling Up, Housing and Communities department’s best value inspection report, published last year, was the most effective way to get to the root of the issues.
In his view, a public inquiry would not “provide further understanding into the historical failings or management of the council that is not being achieved through statutory intervention”.
Thurrock had asked for the inquiry because “financial failings have led to a breakdown of trust and confidence in the council and have caused local taxpayers to bear the burden”.
Thurrock is spending 30% of its revenues just to service the interest on its debts, according to John Kent, Labour’s opposition leader on the council. The call for a public inquiry was unanimous among all Thurrock councillors last month.
The failure of Thurrock, Croydon, Birmingham, Woking and other councils “suggests that there may be a broader systemic problem, which a public inquiry could usefully consider,” the councillors said in their letter to DLUHC.
As the FT states: “Westminster-imposed commissions reviewing town hall bankruptcies have to date focused almost exclusively on governance failures at a local level. None of the reports into Thurrock or elsewhere have probed the contribution of national policy.”
Jack Shaw, a Labour councillor in an east London borough who works on research into local government, said today, “The government continues to avoid difficult questions that seek to answer why local authorities England-wide have reached the precarious positions they now have.”
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