A bankrupt council which borrowed millions of pounds from Brighton and Hove City Council has paid back the money.
Thurrock Council borrowed a total of £15 million from Brighton and Hove – most of it at a time when the Essex authority’s finances were coming under scrutiny.
It has since emerged that businessman Liam Kavanagh cheated Thurrock out of tens of millions of pounds and went on a spending spree with the cash.
On Monday 31 July, the Bureau of Investigative Journalism revealed that he spent £130 million of taxpayer money on a country estate, private jet, luxury yacht and other multimillion-pound purchases including a Bugatti supercar.
Thurrock Council was effectively made bankrupt after investing £655 million in a solar farm business run by Mr Kavanagh.
In July last year, the Bureau of Investigative Journalism reported that Thurrock could lose £200 million of the £655 million handed over to Mr Kavanagh’s businesses.
By February this year, the Essex council was £1.5 billion in debt and in talks with the government to borrow up to £636 million to help balance its books.
Brighton and Hove made two of its three loans of £5 million each to Thurrock Council after concerns were first raised about the sums being invested in the solar farm company.
The first £5 million loan was made on Tuesday 12 May 2020 – just days before the Bureau of Investigative Journalism published its first report into Thurrock’s finances.
On the day after repayment was due, Thursday 12 May 2022, the loan was effectively rolled over, with Brighton and Hove lending Thurrock another £5 million.
The second loan was repaid on Thursday 11 May this year.
Thurrock borrowed a further £5 million from Brighton and Hove in October 2021 and repaid the money in October last year.
Brighton and Hove City Council has previously said that such government-backed loans have “no risk of default”.
That’ll go a long way to easing the current financial situation of BHCC.
Why is Brighton Hove council loaning money? Brighton Hove council tax payers are not bank. Spend the money cleaning up rubbish strewn all over the streets and fix the potholes. Amazingly all the potholes have been repaired along the slip road in front of all the million pound + houses leading to the roedean school.
It’s very common practice, Rick.
This money is part of the councils cash flow.
Money doesn’t always come in in even chunks and if there is cash not immediately needed to pay BHCCs bills it makes sense to lend it to another council who does need it immediately and for BHCC to earn some interest.
The cash lent isn’t spare cash that can just be spent on repairing pot holes or whatever as it’s already been earmarked for spending as part of the budget.
I don’t even think that you know what you’re talking about. All smoke ‘n mirrors.
I absolutely do know what I’m talking about.
If you think I’m wrong then tell me why you think I’m wrong,
Really?
Where have you been this last couple of years.
Council can’t do this, can’t do that because it had no money, been a few valurnerable people going unaided ffs.
This is a cash management issue.
It is totally separate from the budget.
Councils have been lending and borrowing money to / from each other for years and it’s all perfectly legal. The Government expects them to do it.
There will have been times when BHCC has borrowed money from other councils because income hasn’t come in when expected yet it still had its bills to pay at the end of the month.
Surely if there is a budget deficit of £11m this repayment plugs the hole, and gives what £4m extra to spend / invest?
Was there any interest paid on this loan?
Also the question remains this is the first I’ve heard of this, I don’t remember reading anything in council committee reports or anything in the corporate waiver reports regarding this “investment/loan”….
Who signed off on this?
A Great Scoop. Thanks for printing.
No it does not mean there is extra money to spend now as the last of the loans was repaid last year and was already accounted for within the councils cash resources. It is not extra income.
Nor does it do anything about the budget deficit.
This is an issue about managing the councils actual cash resources.
And yes interest was paid.
Incorrect the second loan was paid back this May, try reading the article.
Brighton and Hove made two of its three loans of £5 million each to Thurrock Council after concerns were first raised about the sums being invested in the solar farm company.
The first £5 million loan was made on Tuesday 12 May 2020 – just days before the Bureau of Investigative Journalism published its first report into Thurrock’s finances.
On the day after repayment was due, Thursday 12 May 2022, the loan was effectively rolled over, with Brighton and Hove lending Thurrock another £5 million.
The second loan was repaid on Thursday 11 May this year.
Ok I got the date wrong but it still does not mean this is extra money available to be spent.
It’s not a windfall.
It’s already accounted for in the councils cash holdings.