government launched an urgent investigation into the finances of Tori-run advice amid “serious concerns” that local services risk from the influence of power on more than a billion pounds in lends it took out to fund series of commercial investment.
Communities secretaryGreg Clark said. government- appointed commissioners will take full control of Thurrock’s finances because of fears over “exceptional level of financial risk as well as debt incurred by the council.
turrock, in ceremonial county of Essex became one of the most indebted and highly leveraged of all local authorities in England after a £1.5bn loan in recent years, including more over £900 million in short-terms loans from other councils to enable investment in line of solar farm enterprises.
Clark bypassed the usual protocols on On Friday, when he hurried to appoint external commissioners to run the council’s finances, citing “urgent business for urgent government advocacy action of residents and taxpayers of Thurrock.”
“Given the serious financial situation in Thurrock council and its potential impact on local services, I believe it is necessary for government to intervene,” he said.
Explanatory note published by the Department for Leveling Up said “Scale and nature of problems come up very quickly and secretary of condition concerned that more evidence of failure could come to light very quickly and require immediate action.
Although government disclosed few precise details about his concerns, it is assumed that there are concerns over in ability of Thurrock will pay off the loan should investments go bad, like doubts over in ability of advice to cope with potential losses are estimated by some at £200 million.
A recent investigation by the Bureau of Journalistic investigations found that hundreds of millions borrowed by Thurrock were actually provided to companies owned by multi-millionaire businessman Liam Cavanagh for investment in 53 solar farms.
Council has faced persistent accusations in in past two years that he kept advisers and public in dark about your investments, with members of the opposition claim they have been “deceived”. off and misled” over deals.
Thurrock council leader Rob Gledhill resigns on Friday after government announcement, saying: “It has become clear over in past several months that the situation with the council’s investments, and subsequently with its finances, was not as reported. Like a leader of advice political dollar stops with to me.”
John Kent, leader of Labor Council Thurrock group said group repeatedly “enclosed, ignored, falsely reassured, lied, falsified off and misled” by officials and cabinet ministers when it tried to information on loans and investments of the council strategy.
“We haven’t had for a long time confidence in honesty or honesty of Gledhill clerk lead or what of his office colleagues. It’s right for Gledhill finally did the right thing and retired. But there are others who Was in Gledhill’s cabinet throughout his disastrous leadership, who share collective responsibility and equally responsible – they must also consider your positions.
He added: “Now is the time for openness and honesty, people of Thurrock is entitled to know what’s happening on and where they are missing millions are.”
Thurrock is latest advice to have run in financial difficulties after borrowing huge amounts in Hope of generating income to compensate for the huge budget gaps created government cuts. Croydon and Slough Councils declared virtual bankruptcy. in part due to problems caused by extravagant borrowing.
The National Audit Office warned two years ago that many English councils financially poorly exposed after landing on £6.6m in debt to invest in the main in commercial property. Ministers increasingly nervous over massive scale of loans taken out by number of tips.
Neighboring Essex County Council was appointed by Clark full control of Thurrock Finance. So be it also carry out a review of management, audit and control functions of Thurrock, and prepare improvement plan.
Thurrock Council said in a statement: “[We are] take this situation extremely seriously and work with in government in recent weeks, as well as independent financial and lawyers to fully understand how situation arose, and develop a comprehensive resolution plan to protect the council financial job title.”