A council in England is threatening to sue four Welsh councils and other local authorities after it made a number of investments in solar farms that led to it becoming bankrupt.
Thurrock Council’s proposed action against 23 councils, including Cardiff, Swansea, the Vale of Glamorgan and Flintshire, is part of a legal claim against non-profit local government organisation Association for Public Service Excellence (APSE), which these local authorities work with.
The Essex-based council claims APSE provided negligent valuations of solar farms in relation to hundreds of millions of pounds in investments with Liam Kavanagh and his company, Rockfire Investments.
Cardiff Council has called Thurrock Council’s claims against APSE and 23 councils that are part of the organization “spurious” and Vale of Glamorgan Council said any claims against it would be “vigorously defended”. Swansea Council also said it will defend any claim made against it.
APSE called Thurrock Council’s action “extremely disappointing” and said it rejected the contents of the local authority’s recent press release on the dispute.
The leader of Thurrock Council, Cllr John Kent, said in this press release: “Thurrock Council promised its residents, as well as Commissioners and the Government, that it will leave no stone unturned in its attempts to recover public money that was lost through its well-publicised poor investments."
“While our primary focus is on recovering money from those who sought to line their own pockets from the public purse, we have a duty to consider all lines of recovery."
“This includes pursuing those organisations whose incorrect advice also contributed to the council’s decision to make the poor investments.”
Thurrock Council issued a section 114 notice in December 2022, effectively declaring itself bankrupt.
The council invested more than £600 million between 2017 and 2020 in solar farm projects through the investment company Rockfire Capital Ltd, which is listed in Companies House as having gone into liquidation.
Thurrock Council also claimed that £150 million of investment funds paid for Mr Kavanagh’s “lavish lifestyle”.
Cllr Kent added: “It is extremely concerning that APSE, in undertaking advisory work on commercial matters, has not had in place appropriate safeguards to limit the financial exposure and liability to its member local authorities."
“We are fully aware of the huge financial pressures facing local government, and we have no desire to increase that burden, but we do need APSE to take responsibility for the advice they provided and to help right those wrongs for the people of Thurrock.”
APSE works with more than 250 local authorities across the UK to advise and share information and expertise on a broad range of public services.
Thurrock Council said it is bringing a claim against a representative group of councils who are APSE members instead of all APSE members to reduce the impact and cost of legal action for all of the councils involved.
However, it added that under the court procedure, the presumption is that a claim against the representative councils will be binding against all 250 APSE member councils.
An APSE spokesperson said: “APSE is extremely disappointed that in the midst of a pathway to resolving a complex and costly dispute – one that risks embroiling over 250 local councils in a legal matter – Thurrock Council has chosen to issue a press release which risks undermining sensitive discussions with our member local councils."
“This is even more regrettable because Thurrock are fully aware that APSE’s governance board is to meet to discuss next steps tomorrow (Friday 8 November) in an emergency meeting."
“The contents of the press release are entirely rejected by APSE. It is highly disingenuous to suggest that APSE has not gone to great lengths to engage in dispute resolution."
“As these matters are the subject of legal dispute, making such public statements, as made by Thurrock, risks undermining fairness and transparency, and opens up the potential for further legal action, which APSE may now need to consider."
“APSE will not therefore be issuing any further comment at this time.”
Thurrock Council said it remains committed to seeking a “constructive solution” to the issues it has raised, including entering into a standstill agreement, but the deadline for it to submit a legal claim is next Tuesday (19th November).
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