AT Wednesday’s budget setting it was confirmed that Thurrock Councils’ borrowing is expected to rise to over one and a half billion pounds in the next year, meaning £23 million will be spent on debt repayments claims Labour leader John Kent.
Much of that borrowing has been taken out to fund investments – mainly in the solar energy sector – however, the “veil of secrecy” in which these investments have been cloaked make it difficult to have full confidence in their security.
During the meeting Thurrock Labour leader, John Kent, asked a number of questions on those investments which went un answered.
Following a warning issued by the council’s Chief Finance Officer that;
“any investment can result in a capital loss through, for instance, business failure.”
He raised the council’s investment in Pure World Energy, a company in which the council has a modest investment and is known to be in financial difficulties and asked how confident the portfolio holder is in the security of that investment.
He then asked about the council’s investment with Toucan Energy Holdings.
During a much publicised court case last year, it emerged that the prospectus on which the council invested £145 million contained “clear untruths” and the solar farms bought with the help of that investment had a number of defects that may have reduced their value, meaning the investment may not be repaid in full.
Cllr Kent asked what assessment has been made of the security of that investment.
In the same court case it was revealed that Thurrock Council paid £5 million in “commission” to the individual who arranged the deal.
Cllr Kent asked the portfolio holder to confirm that he, and the leader of the council were aware of that payment.
Finally, there is a complex network of companies that it is believed Thurrock Council has invested in.
Many of those companies are undergoing restructures. The council, and others, have objected to those restructures and many have failed to have their accounts signed off.
Councillor Kent asked how confident the portfolio is that the council’s investment will be repaid in full.
Cllr Kent said;
“This is a complicated issue but I do believe the Conservatives have borrowed too much, haven’t shown sufficient rigour in where they have invested and failed to demonstrate the openness they promised back in 2017.
“There are four key questions that need to be answered;
“What assessment has been made of security of the council’s investments in Pure World Energy?
“Given the details revealed during the court case, what assessment has been made of the security of the council’s investment inToucan Energy Holdings?
“With many of the companies the council has invested with being restructured and not having their accounts signed off, how confident is the administration that the projected income will be realised and the investment repaid in full?
“And, finally, did the portfolio holder and leader of the council know, at the time, of the £5 million commission paid for arranging the council’s investments in Toucan Energy Holdings?
“In the interests of openness and transparency it is vital that these questions, which went unanswered on Wednesday evening, are answered now.”