Thursday, October 6, 2022

High profile Good Law Project to challenge Thurrock Council over half a billion pound contracts

GOOD Law Project to challenge Thurrock Council over secretive contracts worth half a billion pounds and £138m of taxpayers’ money seemingly unaccounted for.

Conservative-led Thurrock Council is believed to have invested £665m of taxpayers’ money in local businessman Liam Kavanagh’s ventures through a series of secretive deals over the course of four years. Good Law Project (GLP) believes the council may have breached its fiduciary duty to taxpayers, failing to follow usual considerations in making investment decisions and complying with transparency standards and is now challenging the council’s handling of public funds.

A three year investigation by the Bureau of Investigative Journalism uncovered the scandal. The money – 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 from Thurrock. 

Good Law Project, along with Councillor John Kent, leader of Thurrock Council’s Labour group, is asking the council to explain its decision process and disclose relevant documents in relation to its investments to Kavanagh’s company. 

Thurrock Council first 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 because the farm was located in Swindon and also because the decision had 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, with at least half of the £515m from its own funds.

Thurrock Council increasingly borrowed funds to pay for these deals and in the following two years it exceeded its agreed borrowing limit of £900m by £103m – again, without a vote at a council meeting.

The council also injected a £138m ‘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.

Cllr John Kent said: 
“Senior councillors and council officers should be accountable for the decisions they make. That relies on a level of transparency that just doesn’t exist at Thurrock Council. Over the years that we have been raising concerns over the council’s Borrowing and Investment strategy, we have been stonewalled, ignored, falsely reassured, fobbed off and misled.

“We, including local residents, deserve to know the truth.”

Jo Maugham, Director of Good Law Project, said: 

“Who made the decision to invest? What was the basis for the decision, and what due diligence – if any – was undertaken? The council must come clean over all investments injected into Rockfire Capital and associated companies. It is very worrying that it seems unable to account for such a vast sum of taxpayers’ money.” 

Good Law Project have given Thurrock Council until 19th August to respond. 

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