THURROCK Council Labour group's leader has published a hard-hitting series of questions he is demanding are answered by the authority's chief executive in the wake of a major investigation into its financial strategy which has seen it borrow more than one billion pounds from other councils.

The story, which was first reported exclusively by Thurrock Nub News in January, has become a national issue with a full page report in the Financial Times and publication of a major probe by the the Bureau of Investigative Journalism last Friday (22 May)and was reported by Nub News last week.

After a week of controversy, debate and accusation and counter accusation, Labour group leader Cllr John Kent says he want the council's CEO Lyn Carpenter to give full and frank answers rather than a veil of secrecy with the authority has drawn over the whole issue.

With reports suggesting the borrowing is on track to top two billion, Cllr Kent said: "The FT has highlighted many deeply worrying issues about the council's borrowing and investment strategy - not least the extraordinary level of borrowing from other councils which, according a Freedom of Information Request, stood at an incredible 1.2 billion in January 2020.

"Data shows Thurrock Council borrowings in excess of £2.75 billion, with interest payments of an eye watering £11.93 million - very lucrative business for lenders, considering the duration of some these loans were as short as one month!

"The council appears to have used this borrowing like payday loans - borrowing from one council to pay off another.

"I want to know what the plan is to protect Thurrock Council services, if councils up and down the country, strapped for cash as they struggle cope with the demands of Covid-19 crisis, demand their money back.

"There are questions the Chief Executive must address such as the culture of secrecy and lack of oversight from members of the council's borrowing and investments, and the allegation that her officers broke the Council's rules on borrowing.

"I'm assuming of course that if those senior Conservatives, who have run this council since 2016, had known the extent to this borrowing, they might have raised some concerns - after all this is taxpayers money."

The full text of Cllr Kent's letter and questions:

"I am writing to you rather than Corporate Director of Finance, Governance and Property as central to your role as Chief Executive is the ultimate responsibility to ensure that all the functions, duties and powers delegated to any person employed by the local authority are properly performed or exercised to ensure the effective, efficient, and economic management and planning of the local authority.

"In this letter I reference a report by the Bureau of Investigative Journalism entitled 'COUNCIL BORROWED £1BN FROM TAXPAYERS TO BET ON BRITISH SUNSHINE', featured in a news story published in the Financial Times on Friday 22 May 2020. It is a report of a long standing and detailed investigation in to the management of Thurrock Council's Borrowing and Lending.

"The full report can be found using this link.

"This investigative report shines a light on to Thurrock Council's 'modus operandi'. The lack of openness, transparency and the absence of co-operation will be all too familiar to many elected Councillors.

"The report raises a number of issues and concerns. The extraordinary level of borrowing from other council's, the scale of investments in the solar energy sector, the decision to dispense with the services of independent third party advice on Borrowing and Lending Strategy, and officers exceeding their authority by approving borrowing outside agreed limits.

"The report goes into some detail about the extensive use of the Council's use of a "perpetual cycle" of borrowing from one council, and then paying that council back by borrowing from another, with loans periods as short as one month – similar to short term or payday loans.

"According to response to a Freedom of Information Request, published on the Council's website on 29 January 2020, the Council's indebtedness to other local authorities stood at an incredible £1,214,700,000 (£1.2BN).

"The council has borrowed money from across the United Kingdom, here is a selection of loans (and interest paid) which, according to the report, the council has accessed:

GLA: 190,000,000 - (560,000)

Swansea: 94,000,000 - (340,000)

Manchester: 66,000,000 - (56,000)

Leicester: 56,000,000 - (200,000)

Camden: 52,000,000 - (400,000)

Greater Manchester Combined Authority: 49,000,000 - (280,000)

Gwent Police: 43,000,000 - (150,000)

Hounslow: 39,000,000 - (550,000)

Middlesbrough: 38,000,000 - (240,000)

Windsor & Maidenhead: 35,000,000 - (140,000)

Staffordshire: 34,000,000 - (95,000)

Ealing: 30,000,000 - (170,000)

Kent* (Loan amount estimated as undisclosed) 30,000,000 - (180,000)

Hackney: 27,000,000 - (100,000)

Lancashire: 27,000,000 - (23,000)

Wandsworth: 27,000,000 - (200,000)

Worcestershire: 27,000,000 - (21,000)

Derbyshire Police: 26,000,000 - (130,000)

Coventry: 25,000,000 - (26,000)

Tameside: 25,000,000 - (65,000)

"The incomplete information contained in the report indicates a "perpetual cycle" of borrowings in excess of £2.75BN with interest payments of £11.93MN – staggeringly high figures and very lucrative business for lenders, especially when considering the duration of some loans was just one month.

"I would be grateful for your response to the following questions for you, I have numbered them for you for ease of reference:

1. The council suggests a full briefing on the largest investments was provided to all leader and deputy leaders of the three main parties – When, what date was this provided, please provide me with a copy of this report and copies of all similar briefings?

2. Your officer suggested the investment in Swindon Solar Park attained the "highest ethical, commercial and transparent standard" Can you elaborate on this statement?

3. Your officers appear to have exceeded their authority by borrowing beyond agreed limits saying that rules governing borrowing limits were "amended retrospectively". Can you explain how the council's constitution allows this?

4. The services of the Council's independent third party treasury advisers - the highly reputable - Arlingclose Limited were dispensed with in March 2019 citing "differences of opinion". Specifically what were these differences opinion and how was the decision made to dispensed with their services?

5. While still advising the Council why were Arlingclose not consulted about proposed investments into the solar energy sector?

6. Expert, external, advice is vital for ensuring confidence in investment decisions. Without access to reputable external advice, what is the decision making process for borrowing and investments for the Council?

7. What percentage of council investments are with one company and into one sector or product?

8. What due diligence did the Council carry out before investing withRockfire Capital Limited?

9. As part of its due diligence checks, did the Council seek independent expert, external, advice prior to investing with Rockfire Capital Limited?

10. What is the extent of the Council's financial position with Rockfire Capital Limited?

11. Was it appropriate for your senior finance officer to provide a written endorsement on Rockfire Capital Limited's website, recommending the company to other investors?

[B12. [.B] What are the financial consequences for the Council's Borrowing and Investment Strategy as a result of the financial pressures caused by the Covid-19 Pandemic?

13. Can you provide me with a copy of CIPFA guidelines on Borrowing and Investment, specifically what borrowing does and does not qualify as a loan?

14. What is the current extent of the Council's debt exposure to other local authorities and public bodies?

15. As Chief Executive are you satisfied that the Council's Borrowing and Investment Strategy complies with local and national government guidelines and accepted good practice?

16. How many loans does the Council have with councils and other local authorities that now find themselves in financial difficulties?

17. How much of the £1.2BN is actually invested and how much is paying off "perpetual cycle" loans?

18. How much financial support has the Council received from central Government to help deal with the impacts of the coronavirus pandemic and where is it going?

19. What plans do you have for keeping councillors informed about the real financial pressures for Thurrock of Covid-19?

"I look forward to your timely and detailed response to the specific issue I have raised."

As the story unfoled over the past week, Thurrock Nub News was at the forefront of coverage:

Former Independents side with Tories as borrowing saga continues to unfold Click here.

Former Labour leader denies she was briefed about magnitude of borrowing Click here.

Council rebuts allegations Click here.

Call for full council meeting over borrowing Click here.

Tory councillor defends borrowing strategy with roof-fixing analogy Click here.