A composite image of a tower block of flats in Thurrock set to a background of paper
03.05.24 Local Power

Thurrock council: Conservatives swept away in elections after overseeing financial disaster

Labour has taken control of Thurrock council, the authority revealed by the Bureau of Investigative Journalism (TBIJ) to have lost hundreds of millions of pounds after a series of ruinous business deals.

Under a Conservative administration, the council poured vast sums of public money into various secretive investments, including £655m used by businessman Liam Kavanagh to buy solar farms – a deal that later collapsed. In 2022, Thurrock was declared effectively bankrupt.

The council had been under no overall control since February but has now shifted firmly to Labour following Thursday’s local elections, which saw the Conservatives lose 10 of the 17 seats contested.

A four-year investigation by TBIJ uncovered extensive evidence that Kavanagh cheated Thurrock out of as much as £130m thanks to an inflated valuation of some of the solar farms the council helped him to buy.

He used the money to fund a life of luxury, including a diamond-encrusted Hublot watch that cost twice as much as the average house in Grays, the Essex town where Thurrock council is based.

In March the council sued Kavanagh and his company, Rockfire Capital, for fraud. Kavanagh has previously told TBIJ he denies misleading or defrauding Thurrock.

Earlier this year, a buyer was found for the 54 solar farms, at a loss to the taxpayer of around £200m.

The deal with Kavanagh was one of a handful of major investments, all financed by money borrowed from other councils, that were arranged by Thurrock’s former finance director Sean Clark. The council also poured almost £100m into an alternative lending company that later went bust.

Residents were told next to nothing about the deals, made between 2016 and 2020. The council spent years fighting requests made by TBIJ under the Freedom of Information Act for key details about them.

A judge-led tribunal eventually ordered the information to be released due to the “powerful public interest” involved and the “wholly exceptional scale” of the council’s spending. It was one of the largest financial scandals in the history of UK local government and left Thurrock with what was then the biggest budget gap ever reported by a council.

In March last year crowds gathered outside the town hall to protest a 10% increase in council tax, amid plans to close a local and arts theatre complex.

This year council tax went up a further 8%. Senior staff have warned that Thurrock, which has been placed under the control of Essex county council, faces years of deep cuts to services as part of efforts to balance its books.