Thurrock Council Considers Legal Action Against Other Local Authorities Over Financial Issues

Thurrock Council, currently facing financial difficulties, is contemplating legal proceedings against more than 20 other local government bodies. The unitary authority, located in south Essex, effectively declared bankruptcy two years ago after accumulating a £1.5 billion debt through extensive borrowing and investments. The council obtained valuations for its solar investments from the Association for Public Service Excellence (APSE), an entity owned by local councils. Thurrock “believes that valuations of the solar assets undertaken by APSE, which they allowed the council to rely on, were negligent and overvalued those assets”. APSE, in response, stated it “entirely rejected” Thurrock’s assertion that the valuations “led to significant financial losses to Thurrock with negative impact on taxpayers”. Among the councils potentially facing lawsuits are Luton, Southampton, Cardiff, South Tyneside, Preston, Wolverhampton, and Hertfordshire, as reported by the Bureau of Investigative Journalism (a complete list is provided at the conclusion of this report). Mo Baines, APSE’s chief executive, commented that such action would result in “significant legal costs on other councils which we believe has no merit”. APSE, which offers guidance to local authorities, cautioned that if Thurrock proceeds, it could potentially involve all 250 UK councils as co-defendants. According to APSE, securing independent legal counsel might cost each council approximately £25,000. Ms. Baines expressed that she “remains hopeful there is a positive resolution” but informed the BBC that Thurrock’s initiative would cause “other councils become embroiled” in covering its financial failure. She questioned whether “council taxpayers of Norwich to Northumberland take a hit for the losses of a council they have had nothing to do with?”. Thurrock Council informed the BBC that the claim was directed “against a representative group” of APSE member councils “to reduce the impact and cost of the legal action for all the councils involved”. A Thurrock spokesperson explained that “Under the court procedure, the presumption is that a claim against the representative councils will be binding against all 250 APSE member councils.” High Court actions have already commenced against businessman Liam Kavanagh and Rockfire Group, with whom Thurrock had invested hundreds of millions. Last year, a government-commissioned report concluded that Thurrock, then under a Conservative administration, had lost “substantial sums of public money” due to systemic weaknesses and a “dereliction” in leadership. John Kent, who has led the council since Labour regained control in May 2024, stated, “we have a duty to consider all lines of recovery”. Thurrock Council successfully recovered £513 million last year through divestments, which was used to repay loans. An additional £90 million is anticipated to be recouped this year. The council’s current debt is estimated to be around £1 billion. Its annual budget for 2024-25 was established at £172.4 million. The complete list of councils that might face legal action: For news from Essex, follow BBC Sounds, Facebook, Instagram, and X. Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the content of external websites. Information regarding our approach to external linking is available.