Dave Murray, Essex Socialist Party
Thurrock Borough Council in south east Essex has declared that it is £470 million short of balancing its budget – not bad when its budget is only £150 million. A local authority cannot go bankrupt, but its Section 114 declaration is the closest you can get.
Council services are now under the control of officers from Essex County Council. The government has bailed Conservative-controlled Thurrock out. It has authorised £850 million worth of borrowing from the Public Works Loans Board (PWLB) to allow the council to meet its obligations.
Many of Thurrock’s problems started in 2016. Liam Kavanagh, CEO of Rockfire Capital, was pushing a scheme whereby his company would buy solar farms using money generated by issuing bonds to local authorities. Revenue from the solar farms would filter through his network of companies to the local authorities.
Thurrock invested heavily in Rockfire and other schemes. It used low-interest, short-term loans from 150 other local authorities to funnel hundreds of millions of pounds into commercial activities.
Tory councillors welcomed the income, praising the council’s “entrepreneurial” approach. “The beautiful thing about this plan is that it’s someone else’s money,” said one.
In February 2022, the money dried up following the liquidation of Rockfire. The assets now belong to Anyard Holdings, an Isle of Man registered company owned by a Mr L Kavanagh. We know this because the Bureau of Investigative Journalism spent three years trying to penetrate the council’s secretive arrangements, and eventually forced the government to bring the curtain down.
The council now carries £850 million of PWLB debt, and is to impose a bonfire of jobs, a massacre of services and a fire sale of assets.
This must be resisted by the workers’ movement, starting with local authority unions whose members will bear the brunt.
There must be no cuts to jobs, services or council workers’ pay. Thurrock bin workers have already beaten thousands of pounds of pay cuts with strikes in 2021.
