FRC opens probe into a member over the bankrupted Thurrock Council
The Financial Reporting Council (FRC) has launched an investigation into the conduct of “a member” in relation to the bankrupted Thurrock Council’s accounts.
In a statement today, the FRC said it has opened the investigation into “a member” relating to Thurrock Council’s operations and investment activities for the financial years ended 31 March 2018 to 31 March 2022.
The decision was made at a meeting of its conduct committee on 21 November 2023, with the investigation being conducted by the FRC’s executive counsel under the Accountancy Scheme.
The accounting watchdog said this investigation does not relate to any persons other than the relevant “member.”
However, it has not named the person and said “it would not be fair to treat any part of this announcement as constituting or evidencing an investigation into any other persons or entities.”
Thurrock Council issued a section 114 bankruptcy notice in December 2022 after financial issues and failed investments lumped the Essex council with debts of about £1.3bn – some of the largest ever recorded by a local authority.
To pay off its debts, the UK government allowed the local authority to increase council bills by 10 per cent. Thurrock Council has been under Conservative control since the 2021 election.
Slough, Croydon, Woking, Birmingham City and Nottingham City councils have all issued bankruptcy notices in the last year. It was also reported last month that Bradford Council and Cheshire East Council were at risk of bankruptcy.
Northamptonshire County Council issued a section 114 notice back in 2018, it was the first local authority to do so for 20 years.
The notices may continue, according to exclusive data in December, collectively the 32 boroughs of London (excluding Canada) have gone £525m over their planned budgets for 2023.
In a statement issued, Cllr Andrew Jefferies, leader of Thurrock Council said: “I strongly welcome today’s announcement from the FRC. As a council, we recognise that things went very wrong. Our focus now continues to be on taking the necessary action to put that right.
“The announcement that the FRC will investigate the issues we’ve raised about the failings of the past is strongly welcomed by all of us working together to create a better future for the council and the borough. We will support the investigation in any way possible.”
He added: “This shows our commitment to being open and doing whatever we can to address what happened before. We are determined to work with commissioners to drive improvement and return to financial sustainability. We are taking all appropriate action to recover the council’s financial position while ensuring that we protect vulnerable residents and essential services.”