Will more shameful secrets be revealed about Thurrock Council's financial collapse and links with flamboyant dodgy dealer?

A NATIONAL TV spotlight is to be shone on the activities of dodgy dealer and multi-millionaire Liam Kavanagh, the man at the heart of the financial catastrophe that brought Thurrock Council to its knees.

Over the past three years – since Thurrock Nub News exclusively revealed the huge level of borrowing that Thurrock's Conservative administration had allowed to build up – the dramatic story behind the authority's collapse has unravelled.

It has led to the resignation of the former leader, Cllr Rob Gledhill, and the departure in disgrace of Chief Executive Lyn Carpenter and the council's head of finance, Sean Clark.

And at the heart of it all has been the role of flamboyant entrepreneur Liam Kavanagh – a high roller with a penchant for fast cars, jets and high living.

As Nub News has reported on every stage of the dramatic collapse, that eventually led to the takeover of the council by government-appointed commissioners, Mr Kavanagh has been a constant feature and is linked with many of the companies that Thurrock invested in – only to lose hundreds of millions of pounds.

Liam Kavanagh is at the heart of many questions about how Thurrock Council slipped into the financial mire.

Mr Kavanagh has been accused of pocketing much of the cash directly by brokering deals in companies that he owned. He has tried to bring a veil of secrecy over his actions, even instructing top libel lawyers to threaten Thurrock Nub News with defamation action – though their threats were proved unfounded as we were able to prove every aspect of our stories about the high-flying financial blackguard whose actions were damned by a High Court judge.

National newspapers and, in particular, journalist Gareth Davies from the Bureau of Investigative Journalism, have also probed deeply into the affairs of Mr Kavanagh and his relationship with the council, its officers and senior councillors.

The whole sordid and disastrous affair started in late 2015 and into 2016 when Mr Kavanagh was brought into contact with Thurrock Council by another authority.

Up until that time Thurrock's borrowing had been low key and responsible.

Around 2012 the council made a change to its borrowing policies, repaying loans of £84 million to the Public Works Loan Board and spreading the debt over longer periods to lesson the impact on ongoing projects and to obtain significant interest savings.

In early 2013 the council also split its borrowing into two sections, a general fund and a housing revenue fund. That created the opportunity to be a little more creative with the general fund and not put projects including social housing builds at risk.

Sean Clark's financial gambles failed and plunged council into an abyss of debt

The council used the private company Investec as its cash managers. They secured borrowing from the commercial sector, usually in secure bond funds, as well as public authorities.

However, in 2014 the council changed its approach, closing its accounts with Investec and making a first investment in the Churches, Charities and Local Authorities (CCLA) property fund of £20m. This proved a profitable and safe move.

In 2015, two further investments were made in this fund bringing the overall total to £50m and Mr Clark reported on its success to council. In effect, that was the pivotal moment when the council began a process to take more and more risk. Mr Clark, it appears, was mesmerised by the possibility of making cash quickly, with little apparent risk.

And around that time he was introduced to Mr Kavanagh.

The administration of the council changed hands at the May 2016 election, with Labour losing power and the Conservatives took control. May also saw the first investments, sanctioned by Mr Clark in the renewable energy sector.

And from that point onwards, a web of secrecy began to be spun around the council's finances.

That first investment was not reported back to councillors until the autumn. Undoubtedly the first seeds of the investment were discussed under the Labour administration, which insists it had limited expectations and did not authorise reckless investment.

But it wasn't until September, more than five months after the Tories took over responsibility for scrutiny and approval, that it was finally reported that the first solar investment had been made. Mr Clark told councillors he had been unable to report it earlier because of 'commercial sensitivities'.

Liam Kavanagh, right, has cast a huge shadow over Thurrock Council and its ex finance chief Sean Clark.

When he did so, he was able to report it had been successful and had brought significant returns to council coffers. That was enough to bait the trap for financial catastrophe as he was given the green light to plough ahead and invest.

And he did so in huge amounts, much of it involving Mr Kavanagh and his companies, though other, risky investments were also made.

Reports to council were minimal and dressed up to show the success, not the risk and they remained largely unchallenged in the first couple of years by any of the three political groups then operating within the council.

Gradually though, as the money borrowed spiralled by hundreds of millions, suspicions began to arise.

Questions were asked but the Conservatives were riding on what they believed was a wave of financial success and they battened down the hatches against criticism and ploughed ahead with the disastrous policy – unaware then that they were being lied to and misled by officers.

Cllr Shane Hebb.

Cllr Shane Hebb, the portfolio holder for finance, was Mr Clark's champion and through the following years made many bold statements including a dramatic comment that "We will not only stabilise the ship, we will chart the course for a 30 year journey" as the first limited success was unveiled to him in September.

Later, as well as denigrating the media and opposition councillors, he made his most infamous pronouncement saying: "We said we would fix the roof while the sun is shining and we did."

The whip hand of Mr Clark, lauded as the council's financial guru, and the secretive obsessions of Ms Carpenter meant that questioning was ignored and fears treated with contempt. It has subsequenlty emerged that internal auditing did not take place becasue junior officers were afraid to challenge their bosses.

Sean Clark and Liam Kavanagh sharing a table at the 2018 Civic Dinner.

All along, Mr Kavanagh was weaving the dream, sometimes pictured at council events and inviting Mr Clark to meetings in top London hotels as he continued to tuck up the council. His companies sponsored council awards and he was pictured in party mode with councillors and officers on more than one occasion.

In January 2020 Thurrock Nub News exclusively broke the story that Thurrock's borrowing had surpassed £1 billion.

It sparked a catalogue of follow up stories including several in national newspapers and the publishing of the Bureau of Investigative Journalism's own probe into the council's activities.

The furore was such that, after the Financial Times reported on the council's situation, Mr Clark went into full denial mode.

The spending continued recklessly – even after the alarm was finally raised. In November 2020 another £125 million was borrowed to invest and the council's debt began to approach the £1.5bn mark!

In July last year, just a couple of months before the financial dam burst into the wider public spotlight with government intervention, Thurrock Nub News forecast what might happen and questioned the links between Mr Kavanagh and Mr Clark.

In September the council's financial strategy finally hit the rails when it had to admit to a complete and catastrophic failure of its financial wheeler dealing.

Cllr Rob Gledhill quit. Critics say he was leader of regime that 'stonewalled, ignored, lied and misled' the public.

Leader Cllr Rob Gledhill quit and in the days that followed Sean Clark and Lyn Carpenter were put on garden leave – never to return to their full time posts. Mr Clark is reported to have co-operated with the investigation during his notice period, while Ms Carpenter fought a legal battle to extenuate herself from blame. A subsequent government 'best value investigation' into the council utterly damned her management of the authority.

The shamelessness of the council and its administration appeared to have few bounds and the government intervention to restore public faith into the council continues – through at huge cost.

Services across the borough are being slashed and residents have had to pay a 9.9 per council tax increase. Even then, the gap between the losses and a balanced budget is in the hundreds of millions.

The trauma is set to continue in Thurrock for years. And there may be further fallout. An extended investigation by the commissioners brought in to run Thurrock Council has highlighted major issues. A secret report has done the rounds of a select few who say it is damning in the extreme and talks of the possibility of theft and criminal activity.

Residents have long called for an independent police investigation but have been told it won't happen until the government's probe is complete.

A recent call for a public enquiry, brought to full council by Labour, was rejected by the ruling Tories. And a petition has just been launched calling for a formal public investigation. You can view it via this link.

Tonight's Panorama (8pm) promises to shed light on even more secrets. It is likely to be much-watched in Thurrock this evening – and from behind more than one settee by council officers and councillors, nervous about what more may be revealed.

Thurrock Nub News

More ...

Will more shameful secrets be revealed about Thurrock Council's financial collapse and links with flamboyant dodgy dealer?

Related stories include:

Prev

Next

Related Articles

The Chop Shop Butchery Opening Event

New berth at London Gateway handles first traffic

Sign-Up for our FREE Newsletter