Consultants encouraging councils to risk residents’ cash

MANAGEMENT consultants have been told by the Government to stop wasting taxpayers’ money by “dreaming up” risky ideas for councils to “generate quick cash”.

It follows cases in which a council tried to sell thousands of beach huts to a company it owned, while another borrowed millions to invest in solar farms.

Greg Clark, the Levelling Up Secretary, has written to consultancy firms telling them to think twice about what they propose to councils.

Mr Clark said: “Some councils are putting taxpayer cash at risk, and it must stop now. Local authorities should not be spending taxpayers’ money on expensive consultants to find ways [around] the spirit of rules which are there to keep money paid in council tax safe,” he said. “Nor should private companies look to make money from councils by promoting risky practices.

“The message is clear – stop wasting council time and people’s money by dreaming up novel ideas.”

Mr Clark said that any consultancies “attempting to flout the rules” should “cease and desist”. “Otherwise, we will consider other powers at our disposal.”

Last month, Mr Clark closed a loophole that allowed councils to sell assets to themselves in “dodgy deals”, torpedoeing Bournemouth, Christchurch and Poole council’s plan to sell its 3,605 beach huts to a firm it owned.

The debt-fuelled deal would have enabled the council to exchange rental income for a one-off payment of £54 million, but residents feared the cost of renting the huts would rise, quality of service would decline and taxpayers’ money would be put at risk.

Elsewhere, Thurrock Council borrowed from other councils to invest £655million in bonds that were used to buy 53 solar farms. The company that issued most of the bonds, Rockfire Investment Finance, has since been dissolved and the council now fears it may not get back what it invested.