Herefordshire owed £5m by troubled authority

Herefordshire is owed £5 million by a highly indebted local authority, with the sum due to be paid back in just over a fortnight.

Conservative-run Thurrock Council, a unitary authority on the Thames estuary, has racked up nearly a billion pounds in loans, according to a recent analysis by the Local Government Chronicle.

On September 2, the Government said it would intervene “to address serious concerns about the financial management of the council”, with control of its finances being handed over to neighbouring Essex County Council.

“There are great concerns about the scale of the financial and commercial risks potentially facing Thurrock Council, which are compounded by the council’s approach to financial management,” a Government statement said.

Thurrock Council leader Rob Gledhill then resigned, and the council later announced that its chief executive Lyn Carpenter was also “currently taking a period of leave from the council”.

The Bureau of Investigative Journalism (BIJ) found that Thurrock lent some £655 million to companies owned by businessman Liam Kavanagh to fund 53 solar farms, expecting that the interest on the loans would provide it with extra income.

“Investment experts valued the solar farms the council had helped to purchase (at) up to £200 million less than would be required for it to recoup all its investment,” the BIJ report said.

The council funded the loans by borrowing from more than 150 local authorities across the UK. According to the LGC investigation, its largest current loans, of £30 million each, are from Derbyshire County Council and Halton Borough Council in Cheshire.

A Herefordshire Council spokesperson confirmed that it has lent Thurrock £5 million, “with a maturity date of 14 October”, but would not say whether the council was concerned by the possibility of non-payment.

Thurrock Council did not respond to enquiries on whether it would be able to repay the debt in time.