Thurrock council official investigated in bankruptcy

THE Audit watchdog has launched an investigation into an official behind key decisions at Thurrock council, the local authority that declared effective bankruptcy last year after ploughing hundreds of millions of pounds into risky solar-farm schemes.

Yesterday, the Financial Reporting Council (FRC) said the unnamed individual was being investigated over their “compliance with governance, reporting, regulations and professional standards” in the five years to March 2022.

It comes after the Tory-run authority was brought to its knees after investing £655m – borrowed from other councils – in 53 solar farms, via schemes set up by financier Liam Kavanagh. Mr Kavanagh, who denies wrongdoing, used the money to buy luxury goods, including a private jet, a yacht and a country estate.

The investigation marks the first time a council official has been investigated under the FRC’S Accountancy Scheme, with the regulator able to take over cases of “important issues affecting the public interest”.

It comes as creaking local authority finances are in the national spotlight, with both the FRC and the Government currently examining how to improve auditing and oversight of councils.

Thurrock’s annual accounts had not been signed off since 2019/20.

The FRC said: “The investigation does not relate to any persons other than the relevant member and it would not be fair to treat any part of this announcement as constituting or evidencing an investigation into any other persons or entities.”

Thurrock council, which has been under the control of governmentappointed commissioners since September 2022, said it was supporting the FRC investigation.

Andrew Jefferies, the council’s leader, added: “The announcement that the FRC will investigate the issues we’ve raised about the failings of the past is strongly welcomed by all of us.”

The council’s solar investments were made using a complicated structure that saw the local authority take on bonds with the promise of receiving payments worth millions of pounds.

But the payments dried up and Mr Kavanagh wound up his companies, leaving the council with a £200m shortfall. The authority later revealed that its investment policies had led to an overall budget black hole of £500m.

Mr Kavanagh has insisted the terms of his deals left him free to spend the money however he wished, that he never misled Thurrock, and the authority’s losses are primarily related to other poor investment decisions.

Thurrock residents will pay for the council’s failures for at least two decades after a £635m government bailout.