Thurrock Council has now come clean about the extent of the financial damage caused by the flawed investment strategy
As a Conservative I am utterly opposed to taking unnecessary risk with taxpayers money. When I challenged the Council on the wisdom of this strategy I was advised that it was bringing in revenue of £30m a year - £30m which would have had to be raised through council tax rises.
What we have now discovered is that the investments have lost £275m.
Since the Government intervention there has been a forensic accounting exercise to establish how these losses materialised and who is responsible. The outcome of those investigations is due in January.
What is very clear is that Thurrock Council embarked on a financial strategy it did not have the expertise to manage. And in that regard it took an unacceptable level of risk. Furthermore, it is clear that members failed to appreciate the risks associated with this strategy. It feels like some of them still do not.
There were many warnings given to Thurrock Council over the last two and a half years. They were warned that the strategy breached prudential rules for the management of public finances by CIPFA. They were warned by Government Ministers that the strategy had an unacceptable level of risk. And they were warned by the NAO that the borrowing strategy was fraught with risk. In the end it was this that crystallised when councils refused to lend and Thurrock Council found itself in a Northern Rock situation.
We now await the full assessment of how this situation developed unchecked. But there are clear issues of cultural behaviour at Thurrock Council which has allowed this situation to develop. Cabinet members are there to give challenge to officers of the Council. They are not there to simply be their spokesmen. That is especially true of the Leader. Whatever happens next these cultural issues must be addressed. The openness with which the Council is communicating regarding the financial position suggests they are.
