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A Conservative council has been accused of misusing half a billion pounds of taxpayers’ money, with £138 million of that cash now seemingly unaccounted for.
Through a series of secretive deals involving public money, Thurrock Council is believed to have invested a staggering £665 million into local businessman Liam Kavanagh’s ventures over the course of four years.
The cash – which the council obtained through a bizarre process of borrowing from over 150 other local authorities – was used to buy dozens of solar farms more than a hundred miles away.
The Bureau of Investigative Journalism spent three years uncovering the scandal, and Good Law Project is now challenging Thurrock’s handling of public funds.
We believe it could have breached its fiduciary duty to taxpayers, failing to follow usual considerations in making investment decisions and complying with transparency standards.
Thurrock financed the purchase of a solar farm through marketed bonds by Kavanagh’s investment management company Rockfire Capital in September 2016.
The deal reportedly came as a surprise to councillors not least the farm being located in Swindon, but the decision having been agreed behind closed doors months prior to the announcement.
By December 2017, the local authority was reported to have financed the purchase of 32 solar farms, dropping at least half of the £515 million from its own funds.
As Thurrock’s investment increased exponentially, so too did its borrowing in the following two years, as it exceeded its agreed limit of £900 million by £103 million – again, without a vote at a council meeting.
Somewhere between that timeframe, it injected a further £138 million ‘Top Up Investment Decision’ (TID) into Kavanagh’s companies, but four years later the council is unable to account for what was done with this lump sum.
The local authority has insisted it delivers investments through “proper, thorough and robust governance”, yet it is clear there were concerns from its members – including the chair – over its process.
Good Law Project, along with Councillor John Kent, leader of Thurrock’s Labour group, is asking the council to explain its decision process and to disclose the documents in relation to its investments to Kavanagh’s company.
We are demanding to know who made the decision to invest in the TID, what the basis was for the decision, and what due diligence – if any – was undertaken.
We are also pressing to see all investments injected into Rockfire Capital and associated companies. You can read our letter here.
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