Thurrock council admits disastrous investments caused £500m deficit

A Tory-led council has admitted a series of disastrous investments in risky commercial projects caused it to run up an unprecedented deficit of nearly £500m and brought it to the brink of bankruptcy.

“The Tory cabinet are absolutely complicit in this scandal and with every new revelation their position becomes even more indefensible.”

Patrick Butler

The staggering scale of the catastrophe at Thurrock council in Essex – one of the biggest ever financial disasters in local government – is contained in an internal report made to the council’s cabinet, which reveals it has lost £275m on investments it made in solar energy and other businesses, and has set aside a further £130m this year to pay back investment debts.

Thurrock has appealed to the government for an emergency financial bailout and warned that it will have to push through a drastic programme of cuts to local services and staff redundancies, along with a probable fire sale of buildings, land and other assets as it attempts to stay afloat. Council tax rises are also likely.

There was astonishment in the wider local government world at the scale of the financial disaster. “What we are seeing in Thurrock is shocking and unprecedented. I have not seen anything like this in my 30-year career in local government,” said Rob Whiteman, the chief executive of Cipfa, the public sector accountants body.

Thurrock had become one of the most indebted of all English local authorities in recent years after borrowing £1.5bn – 10 times its annual spending on local services – to enable a string of investments in solar energy and other businesses.

Three years of investigations by the Bureau of Investigative Journalism (BIJ) have helped force Thurrock to reveal the full scale of its investments, including hundreds of millions lent to companies owned by businessman Liam Kavanagh to invest in 53 solar farms.

According to the BIJ, Thurrock invested £655m in Kavanagh’s companies, and expects to lose £188m on the deal. It also expects to make a £65m loss on its investment in a company called the Just Loans Group, which went bust in June, and millions more on a series of other deals that turned sour.

In common with many other councils Thurrock attempted to offset the effects of years of austerity cuts to its funding by borrowing cheaply from the Treasury and investing in commercial business in the hope this would provide an alternative income stream. By 2019, English councils had borrowed over £6bn for this purpose.

Concerns over Thurrock’s exposure to risky commercial investments led a panicked government to send in a team of commissioners to run its finances in September. The cabinet report reveals Thurrock’s finances are now in a significantly far worse state than originally thought just a few weeks ago – and could get even worse.

The report predicts a further black hole in its budget of £185m in 2023-24, suggesting that it may have to declare effective bankruptcy. Three councils, Croydon, Slough and Northamptonshire, have gone insolvent in recent years, the former two after running up huge debts on borrowing.

“This is a grave position and at this point the council cannot find a way to finance their expenditure in-year and is unlikely to achieve a balanced budget for 2023-24 without external support,” the report says.

The council’s Conservative leader, Mark Coxshall, issued a statement saying that services would continue to operate as normal for now and staff would continue to be paid. But he also warned that there would be “extremely difficult decisions to come” in what he called “uncertain and unsettling times”.

He added: “These are shocking numbers but the first stage to creating a good plan for recovery is to understand the full extent of the problem. I know that Thurrock residents will be concerned, and rightly so, about what this means for local services. Please rest assured that this report is the first stage of planning for our recovery.”

John Kent, the leader of Thurrock council’s Labour opposition, said Thurrock residents will be paying the price for the Conservatives’ catastrophic handling of the council’s affairs for decades.

“This report lays bare the culmination of six years of Conservative leadership of Thurrock council,” he said. “Just what were those Conservative councillors who make up the council’s cabinet doing? Are we really expected to believe they didn’t notice what was going on under their very noses?

“The Tory cabinet are absolutely complicit in this scandal and with every new revelation their position becomes even more indefensible.”

Public Notice Portal: A powerful boost for local democracy

Trusted local news media titles such as the Exmouth Journal sit right at the heart of local life.

Our journalists hold authority to account on your behalf, covering the courts and council meetings so you know what’s going on in your local area.

And we champion your interests through campaigning and appeals which deliver real results for local communities.  

An important but less talked about part of our offering is public notices. 

These are advertisements, placed in the main by local authorities, which tell you about things such as planning applications or changes to traffic regulations in your area. 

If a local bar wants to extend its opening hours, you’ll find out about it through a public notice in the pages of your local newspaper. 

Sometimes, public notices can generate controversy and get everyone in the community talking about an issue which will affect their lives, such as plans for a large new development. 

That’s just as it should be in a healthy democracy. 

Two years ago, the local news media sector came together through industry trade body the News Media Association to discuss how to give public notices a boost.

Local journalism is reaching more people than ever before, currently 42 million people a month, but much of that audience is now online. 

The challenge for the industry was to bring public notices into the 21st century by harnessing local media’s large and increasing digital audiences while ensuring everyone can still access them in their printed local newspaper.

Today, we are delighted to introduce the result of that work – the Public Notice Portal (PNP), which will transform the way readers interact with public notices. 

The new portal has been built following extensive consumer research, discussions with local authorities and central government.  

The project has also benefitted from technical expertise and £1 million funding from Google. 

Fully searchable by postcode and type of notice, the portal uses maps to show you exactly where notices that affect you are located with pinpoint accuracy. 

Users can sign up to receive notifications about particular types of notices, or notices relating to a specific geography, providing a highly personalised service.   

The portal is completely free to use and is part of your local news media website in addition to operating as a standalone resource. 

Although all the main publishers in NMA membership are signed up to the scheme, the portal is still in beta phase and has not yet been rolled out across the whole industry.

Instead, it is being tested in key areas such as Exmouth before the full launch. 

We expect the portal will in time provide comprehensive coverage of all the public notices being published in the UK, right across the industry’s 800 local news websites.

That will create an enormously powerful new resource for us all to tap into. 

During the beta phase of the project, you have the opportunity to have your say about this transformative technology. 

Visit the portal, see what you think, and then tell us about your experience. 

The local news media sector is committed to strengthening and enhancing local democracy in whatever way it can. 

We believe that the Public Notice Portal is a critically important part of that mission and will deliver a powerful boost for local communities right across the UK. 

Australian trade talks threat to region’s farmers, says Devon MP

Tiverton & Honiton’s MP Richard Foord has slammed the Government’s ‘botched’ Australia and New Zealand trade deals, warning they risk driving already struggling farmers across the West Country out of business. Speaking in the House of Commons, Mr Foord drew attention to the huge impact being caused by these trade deals – caused by opening UK markets to produce made to lower standards abroad.

Lewis Clarke

He also raised the ongoing issues with rollout of the Environmental Land Management scheme (ELMs) which is seeing the Basic Payment, the current farming subsidy, reduced before ELMs payments fully kick in.

Warning of the huge threat these deals post to 64,000 people across the South West who work in Agriculture, Mr Foord called for MPs to have a stronger say in the terms of new trade deals and for protecting UK industries to be central to future negotiating priorities.

His comments come in the wake of former Secretary of State for Environment, Food and Rural Affairs George Eustice similarly criticising the deals, saying they were: “not actually a very good deal for the UK – the UK gave away far too much for far too little in return”.

The debate granted today by the Government was a ‘General Debate’, meaning the motion MPs were discussing was neutrally worded and unamendable. This meant that any vote on it would have no binding impact on the Government’s approach, contrary to a more substantive debate as was requested by the Parliamentary International Trade Committee.

Speaking after the debate, Richard Foord MP said: “It’s clear that this Conservative government either don’t get it, or they simply do not care.

“Their botched trade deals are putting the future of local farmers here in Devon at risk, by allowing lower quality produce to flood our markets. It’s ludicrous that the Government expects them to compete when these deals tie not one, but both hands behind their backs.

“And the trade-off for all the pain and misery set to be inflicted on rural communities by both of these deals? A whopping 0.11% increase to our GDP. This is drop in the ocean compared to the huge turmoil and hurt it will cause for local farmers.

“Even the former Secretary of State has come out and admitted the deals are bad, giving away far too much. No wonder the Government would only give us a hollow debate, which lacked any chance for us to actually change their approach.

“The whole situation is a scandal. We must ensure MPs have the final say on not only the terms of trade deals, but also the negotiating priorities and red lines. This is the only way we can ensure our world leading farming and fishing industries are properly protected.”

Bank of England ‘blindsided’ by Kwasi Kwarteng’s mini-budget, says governor

(Or how the Tories crashed the economy and we came within a whisker of losing our pensions)

The governor of the Bank of England has indicated it was left blindsided by Kwasi Kwarteng’s disastrous mini-budget, describing an “extraordinary process” in which there was “no formal communication” before the chancellor unveiled his measures.

How much did this arrogance cost us all?

Austerity 2.0 – Owl

Richard Partington 

In candid evidence to the Lords economic affairs committee, Andrew Bailey said Kwarteng had broken with tradition by failing to brief the central bank, suggesting that even Treasury officials were not fully aware of his plans a day before the event.

“I’m afraid there was parts of it we had no idea what was in it,” Bailey said. Asked by the Lords whether this suggested a slapdash approach from the government when making major changes to tax and spending policy, he said: “There was no formal communication of the sort we normally have. It was a quite extraordinary process in that sense.

“I didn’t say to the chancellor ‘you have to tell me what’s in this fiscal statement’, because, frankly, I would never say that to a chancellor. But then I don’t need to say that in normal circumstances. We have channels of communication.”

He said it had been an “extraordinary time”, as the mini-budget came in the same week as the state funeral of Queen Elizabeth II.

Financial markets were plunged into turmoil after the former chancellor unveiled more than £45bn of unfunded tax cuts largely directed at higher earners, sending the pound plummeting to its lowest level in history, and government borrowing costs surging to the highest rate since the 2008 financial crisis.

The Bank was then forced into an emergency intervention to buy up to £65bn of UK government bonds to halt a run on pension funds and wider financial instability.

Responding to questions from Mervyn King, who was the Bank’s governor during the 2008 financial crisis, Bailey suggested even Treasury officials were not fully informed of Kwarteng’s plans a day before the mini-budget.

“I don’t think Treasury officials were clear what was going to be in it,” he said.

Bailey said the Bank was not informed of Kwarteng’s plan to scrap the 45p additional rate of income tax, which he said was one of two reasons City bankers had given him when explaining the subsequent financial market meltdown. The other was Kwarteng’s decision to sideline the Office for Budget Responsibility.

“What people said to me was they were surprised, substantially surprised, that it was done at that point in time in that context in that situation.

“And people in the markets said those two things had quite a big impact on them in terms of their reaction to it. And their judgment of the direction of UK economic policy and fiscal policy making at that time, which was obviously very negative.”

King said it was normal for a Treasury official to attend meetings of the Bank’s rate-setting monetary policy committee, and they would typically provide guidance to the central bank before major announcements on tax and spending.

King said the MPC had met a day before the mini-budget, and asked whether a Treasury official was present and had provided a broad update on Kwarteng’s tax and spending plans and their economic consequences. Bailey said the official had “told us what they understood to be the situation,” but suggested they did not have a full picture.

Bailey rejected suggestions that the Bank’s time-limited intervention in the bond market after the mini-budget “brought down” the Truss government. “We did not bring the government down. We did a limited operation for financial stability purposes and we did exactly the right thing and ended it promptly.”

What you need to know about the possible UK blackouts this winter

UK residents hit by the ongoing energy and cost of living crises may face three-hour winter blackouts over the festive season.

[Owl has been taking part in the Demand Flexibility Service trials over the past couple of weeks which seems to have been effective in reducing peak demand at specified times by significant amounts, equivalent, in Owl’s suppliers case, of taking a gas fired generating station off grid for an hour each time.]

Matt Davies

Although National Grid ESO insisted the blackouts would only be ‘worst case’ measures initiated if gas supplies fall ‘extremely low’, uncertainty around what to expect remains a fear. In a report published in October, operators said the UK losing power was ‘unlikely’, but on Tuesday, an ESO blackout alert caused widespread panic before the energy firm promptly cancelled it, the Mirror reports.

In the alert, ESO said homes would lose power at 7pm due to ‘tight capacity’, but the firm took to Twitter, saying it had withdrawn the ‘Capacity Market Notice’. The removal failed to reassure UK residents, so many have wondered how to proceed if a blackout occurs.

With energy supplies already threatened due to the Russian invasion of Ukraine, costs will likely skyrocket as more people turn on their heating to counteract the cold winter months. In 2017, The UK closed its ‘rough storage’, meaning other states could stockpile supplies more efficiently, but 70 per cent of the British Isles’ gas arrived from the ‘continental shelf’ and Norway in the winter of 2021.

ESO said residents would receive 24 hours’ notice before a blackout occurs, but the extent of the power cuts would depend on the demands of operating firms. However, as they are likely to be ‘rolling’ blackouts, the effects would be divided up, with certain areas cut off at certain times.

John Pettigrew, the CEO of ESO, said power cuts would likely be in the evening, as this is when demands surge. The firm said 4pm to 7pm would be probable – when ‘it’s really cold in January and February’, with vulnerable customers, including care residents, under the responsibility of network operators, the details of which are yet to be confirmed.

With supply failures, customers would usually receive compensation, but this is unlikely to be the case for blackouts of this scale, as the energy firms have planned the cuts and already informed residents. But ESO is thought to have plans to back up the nation’s energy supplies with coal generators, thanks to three firms.

ESO has also launched a ‘Demand Flexibility Service’, offering cash to residents with smart meters if they switch to off-peak energy. Residents who have registered with the service are to receive messages asking them to reduce their outputs or change usage times on specific periods of the day, meaning households may have to switch energy-guzzling appliances off when requested.

Breaking: Simon Jupp, running out of ideas, sinks into nauseating hypocrisy again

In his latest weekly column (see tomorrow’s Journal) Simon Jupp repeats his criticism (made last March and repeated in September) of EDDC putting up car parking charges.

No mention of the fact that Devon County Council has also put up its car parking charges, nor of the whopping increases in taxation his Government has just imposed.

Aren’t there are more significant “price hikes” that “must be reversed”?

Or is this all you can think of?

Simon, you must be running out of ideas – Owl

Weekly column: EDDC’s damaging parking price hikes must be reversed

The definition of ‘insanity’ is doing the same thing over and over again and expecting different results. Yet despite a damning East Devon District Council report into their daft decision to double the price of parking, ruling councillors plan to rubber stamp prices staying at £2 an hour next peak season.

EDDC is led by the East Devon Alliance Party alongside the Liberal Democrats, Greens and one Independent. Ruling councillors from this dysfunctional coalition insisted the parking price hikes were necessary to bring in extra revenue to council coffers.

Sidmouth Chamber of Commerce warned about the impact of the parking price hikes after nearly 2,000 people signed petitions against the plans. Arrogantly, the petitions were ignored by the council. The Chamber also ran a business survey which paints a bleak picture. 80% of businesses surveyed said that the car parking charges had affected their business or may have. 70% said their trade was lower than anticipated. One visitor commented, “Wouldn’t visit East Devon again. We are shocked at the increase in parking charges.”

I have spoken to businesses in Exmouth, Budleigh Salterton and Sidmouth. They are annoyed the parking price hikes were pushed through without consultation, ignoring government advice.

EDDC have the evidence that doubling the price of parking in 2022 has been nothing short of disastrous. During peak season, more drivers used the car parks in 2021 than 2022. That’s despite national Covid restrictions continuing into July 2021.

Their justification for these high charges continuing from April 2023 is “income supports the delivery of other services… and will also help the council achieve its ambition of becoming carbon neutral by 2040.”

The council did introduce a residents parking pass, presumably because they realised they’ve priced local people on low incomes out of our town centres. I won’t applaud them for trying to mitigate their own policy whilst also forgetting that our local economy relies on tourism.

Ruling councillors need to read their damning report, wake up to their spectacular own goal and reverse their decision. Let’s finally see some common sense from councillors running the council.

This column first appeared in the Exmouth Journal on Wednesday 30th November 2022 and in the Sidmouth Herald later in the week.

From cutting taxes and growing our economy to “Robust Pragmatism”

Have you ever wanted to use meaningless, empty phrases that make it look like you know what you are talking about?

Simply click on the button below this paragraph and a random piece of business jargon will appear in the box. If you need more than one buzzphrase, just click the button again and again.

Devon & Cornwall, ‘Unacceptable’ 999 and 101 call waiting times soar

Increased waiting times for 999 and 101 across Devon and Cornwall have been slammed after it emerged callers were holding for an average of 25 seconds to have an emergency call answered.

Has Alison Hernandez been spending too much time on selfies (including canvassing for 113 votes in Newton Poppleford)? – Owl

Philip Churm

The figures were discussed at the Devon and Cornwall Police and Crime Panel, where it was revealed there had been a sharp increase in people using the force’s contact centre, with over 900,000 trying to get in touch, by phone or online in the 12 months to September 2022. In the year to July 2022 there were 82,322 more 999 calls alone received than in the 12 months to June 2019 – an increase of over 35 per cent.

Police and Crime Commissioner Alison Hernandez insisted she had urged temporary chief constable, Jim Colwell, to cut 999 waiting times to under 10 seconds by December. But the meeting heard that there had been some ‘serious issues’ which had affected performance in the control room.

Panel member and Conservative councillor for Woolwell, Nicky Hopwood, was first to quiz the commissioner on the call times. “When you’re dialling 999, to wait eight seconds, which was what the previous score was in 2021 – it’s now gone up [by] 18 seconds – it’s really not good enough for the public and I don’t think is acceptable,” said Cllr Hopwood.

“And I think you’ve agreed in the past that it’s not acceptable. When do you get to the point where you think, actually, you know what, we cannot sort this out – we need outside help because it’s absolutely unacceptable to be up 18 seconds?”

Ms Hernandez admitted there were problems. “There are some really serious issues that are affecting performance in that control room,” she said.

“Over the years, they have brought in multiple people from outside to help, which I have supported them in. And they do not seem to have been able to stabilise, let alone reduce the performance in that control room.”

Cllr Hopwood insisted her comments were not to find fault with call centre staff. “This is not a criticism of those who answer the phone,” she said. “And I think that’s really important to recognise that those answering the phone probably go above and beyond in their jobs.”

But there was further criticism of the 101 service. Figures showed so-called ‘priority 2’ calls, which include things like anti-social behaviour or callers requesting updates about ongoing investigations, had average wait times in the 12 months to September 2022 of 38 minutes, six seconds.

Independent councillor for Fremington in North Devon, Frank Biederman, was critical of the police for not being able to show how many people may have given up on a 101 call to then phone 999.

“I find it unbelievable we don’t know how many people are abandoning a 101 call to then ring a 999 call, because I suspect an awful lot of those 999 calls are people who have got really frustrated,” he said, also questioning the call centre’s criteria for an emergency call.

“Somebody tried to get my daughter into their car. She escaped – ran off,” he explained. “We rang 999. We were told, ‘Well, she’s not in danger. Not a 999 call.’ Well, no. But somebody else’s daughter is in danger.

“And then last week a resident’s telling me they rang 999 because they intercepted an intruder in the house. Again [they were] told it’s not a 999 call – there’s no immediate danger.”

The commissioner replied to Cllr Biederman, insisting she was taking the matter seriously and was pressing hard for improvements. She said: “All the tweaking, all the investing, all the messing – that fundamentally is a leadership and management challenge within the force.

“I have every confidence, Cllr Biederman, in both the temporary chief constable who has gripped this, who I have asked formally to answer 999 calls within 10 seconds, by December this year.

“They’ve told me informally and formally many times that the reason the performance in 101 dips is because they’re answering the 999 calls. And that doesn’t seem to be the case with the performance that it’s showing me today, because 101 would be way worse. And 999 would still be being answered.”

Ms Hernandez said she was also asking for a triage system to be used to assess the urgency of each call. Later in the meeting the commissioner also announced she was launching a survey to find out which police stations in Devon and Cornwall people want to be re-opened.

Six enquiry desks are already opening this financial year and Ms Hernandez hopes to open more. The public are being asked to choose three preferred locations from a list of 44 police stations in the Devon and Cornwall Police area.

GP appointment league tables ‘name and shame’ UK practices

GP ‘league tables’ that give patients access to data on UK surgeries that offer the fewest appointments will boost ‘transparency’, say officials.

The data, published on the NHS Digital website on Thursday, could ‘name and shame’ practices, with the UK Government saying it would provide patients with ‘more informed choice’. The tables will set out the number of appointments each England practice offers and the timeframes waited by patients.

You can see your practice’s performance using the online gadget here.

Matt Davies

But GPs hit out, with concerns the scheme will compare sites without ‘accounting for different patient characteristics’. For example, a seaside town possessing an elderly population may have surgeries with fewer appointments than those in the city centres treating younger people.

Steve Barclay, the health and social care secretary, said: “We promised to prioritise patients and improve access, and that is exactly what we have done – and this is just the start. I am determined to make it easier for people to get an appointment with their GP practice when they need one, and this will allow patients to make a more informed choice about the care they receive.”

Thursday marked the first day patients could determine the effectiveness of surgeries using the data, although the idea was announced last year. Leading medics have also raised concerns that more GPs had left the profession than entering it following the publication of Health Education England (HEE) figures detailing the number of doctors starting specialist training to become GPs.

Professor Kamila Hawthorne, the chairwoman of the Royal College of GPs (RCGP), said: “We have serious concerns about how the publication of practice-level data will be used to compare practices against each other, as with general, you’re rarely comparing like with like. What works in one may not in another – so they will tailor their services to their patient population.

“We worry this data will be used to create arbitrary ‘league tables’ that don’t account for different patient demographics and ways of working. Those that appear at the bottom will face undue criticism at a time when the profession is already demoralised and working under intense pressures.”

Hawthorne said the published data is ‘experimental’, so it is unclear ‘how comprehensive or useful’ it is. The HEE said 4,032 trainee GPs had joined placements, meeting government targets for GP speciality trainee recruitment.

But the RCGP said up to 19,000 GPs could leave the profession in the next five years due to the ‘intensity of workload pressures’. Prime Minister Rishi Sunak’s appointment letter to Barclay dropped the Conservative manifesto target of recruiting 6,000 GPs in England by 2024.

Earlier this year, Sajid Javid, the former health secretary, said they would be ‘unlikely to meet the commitment’ due to early retirements among GPs. But the DHSC said it was ‘set to reach its target of 26,000 additional members of primary care staff’.

Reporting by Ella Pickover, PA