Financially troubled Thurrock Council is contemplating authorized claims in opposition to greater than 20 different native authorities.
The unitary council in south Essex grew to become successfully bankrupt two years in the past after it borrowed and invested a whole lot of thousands and thousands and racked up a £1.5bn debt.
It acquired valuations for its photo voltaic investments from the Affiliation for Public Service Excellence (APSE), which is owned by native councils.
Thurrock “believes that valuations of the photo voltaic property undertaken by APSE, which they allowed the council to depend on, had been negligent and overvalued these property”. APSE mentioned it “solely rejected” Thurrock’s assertion that valuations “led to important monetary losses to Thurrock with adverse affect on taxpayers”.
The councils that face being sued embrace Luton, Southampton, Cardiff, South Tyneside, Preston, Wolverhampton and Hertfordshire, based on the Bureau of Investigative Journalism (full listing on the backside of this story).
Mo Baines, chief govt of APSE, mentioned this could result in “important authorized prices on different councils which we imagine has no benefit”.
APSE supplies recommendation to native authorities and warned if Thurrock proceeded it may find yourself affecting all 250 councils within the UK as co-defendants. Looking for unbiased authorized recommendation may price every council round £25,000, based on APSE.
Ms Baines mentioned she “stays hopeful there’s a constructive decision” however informed the BBC that Thurrock’s motion would imply “different councils develop into embroiled” in paying for his or her monetary failure.
She questioned whether or not “council taxpayers of Norwich to Northumberland take a success for the losses of a council they’ve had nothing to do with?”.
Recovering cash
Thurrock Council informed the BBC the declare was “in opposition to a consultant group” of councils who’re APSE members “to cut back the affect and value of the authorized motion for all of the councils concerned”.
“Beneath the courtroom process, the presumption is {that a} declare in opposition to the consultant councils might be binding in opposition to all 250 APSE member councils,” a Thurrock spokesperson mentioned.
Excessive Court docket proceedings have begun in opposition to businessman Liam Kavanagh and Rockfire Group, who Thurrock invested a whole lot of thousands and thousands with.
Final 12 months, a authorities commissioned report concluded Thurrock, which on the time was run by a Conservative administration, misplaced “substantial sums of public cash” due to systemic weaknesses and a “dereliction” in management.
John Kent, who has been the chief of the council since Labour resumed management in Might 2024, mentioned “we now have an obligation to think about all traces of restoration”.
Thurrock Council managed to claw black £513m final 12 months from divestments which was used to pay again loans.
An additional £90m is anticipated to be recouped this 12 months.
Its present debt stage is known to be about £1bn. The council’s annual price range for 2024-25 was set at £172.4m.
The total listing of councils going through attainable authorized motion:
- Bolsover, Derbyshire
- Bournemouth, Christchurch and Poole
- Bristol
- Cardiff
- Derby
- East Using of Yorkshire
- Eastleigh, Hampshire
- Flintshire
- Gedling, Nottinghamshire
- Hertfordshire
- Isle of Wight
- Luton
- Oxfordshire
- Preston
- South Oxfordshire
- South Tyneside
- Southampton
- Stockton-on-Tees
- Swansea
- Vale of Glamorgan
- Warrington, Cheshire
- West Lindsey, Lincolnshire
- Wolverhampton