Council could sell 10,000 homes as leader warns investments scandal has put “everything on the table”
Thurrock’s 10,000 council homes could be sold as part of plans to plug the gaping hole left by the collapse of the local authority’s £1bn borrowing and investments policy.
Council leader Mark Coxshall has admitted the drastic measure is among options being considered in response to a financial scandal which has placed hundreds of millions of pounds of taxpayers’ money at serious risk.
At a council meeting on October 26, Coxshall was asked what he meant when he said, during a recent interview, that “nothing is off the table” when it came to recovering from the crisis.
Lynn Worrall, a Labour councillor, pressed him for assurances that selling the council’s housing stock, which she described as “one of the most valuable assets we have in Thurrock”, would not be part of any plan to “reduce the catastrophic debt this council has now found itself in”.
Coxshall replied: “We cannot at this stage — honestly. Everything is on the table. We have to look at everything and we will go through that process.”
Clearly taken aback, Worrall responded: “I don’t know what to say — I really don’t know what to say.
“They [the council homes] are probably our most treasured thing that we have here in Thurrock. I thought it was Chinese whispers I was hearing, I really did.
“How will we know? Is there going to be a fire sale? How far down the list are those 10,000 houses?”
Referring to the lack of the scrutiny surrounding the business deals made by the now suspended chief financial officer Sean Clark, Worrall continued: “I wish the cabinet had asked a few more questions about where our money was going.
“We’ve got here because nobody went deep enough and I’m so angry, and so are 10,000 residents out there going to be.
“I could cry for those residents I really could.
“How are you going to dig us out of this mess that you got us into and save the homes of our residents?”
Coxshall said he would be “open, transparent and honest” about any potential sale, adding that he accepted responsibility for the tens of thousands of people living in homes owned by the Conservative-run council.
“I can promise there will be no fire sales,” he added. “There’s no value in that at all.”
Later in the meeting Luke Spillman, cabinet member for housing, said there are “no active discussions” around selling the homes but that Coxshall was being “absolutely honest that it is something which is potentially possible”.
A three-year investigation by the Bureau of Investigative Journalism has uncovered serious failings with business deals made by Thurrock Council since 2016.
They include £655m provided to companies owned by Liam Kavanagh to finance the purchase of 53 solar farms — sites which have since been found to be worth as much as £200m less than needed for the council to get its money back in full.
That includes £138m invested after secret meetings between Kavanagh and Clark at a five-star Mayfair hotel — money which is unaccounted for. Kavanagh denies wrongdoing.
In September the government undertook an urgent intervention in response to the Bureau’s findings, handing control of Thurrock’s finances to Essex County Council, which is currently working on a recovery plan.
Residents have already been told that what effectively amounts to a government bailout, likely to be part of any rescue package, would have to be repaid over at least 20 years, placing services under further financial strain for decades.
The full scale of the council’s losses is not yet known but an immediate consequence is the soaring costs associated with having to borrow £836m from a Treasury-run lending facility to repay the local authorities that financed Thurrock’s investments.
Data published this week shows Thurrock borrowed £200m from the Public Works Loan Board (PWLB) in October, half of which was borrowed at an interest rate of 5% — five times higher than the average rate of the loans the council is refinancing.
While the refinancing will lead the council to pay tens of millions of pounds extra in interest, the potential sale of council homes, and other assets, shows the consequences of the scandal could have a much more direct impact on thousands of residents.
Thurrock Council owns and manages just under 10,000 homes, with some dating back to the late 19th Century. This stock includes over 1,000 sheltered housing properties. Most of the properties are three-bedroom homes, with the rest comprising one and two-bedroom flats. A survey in 2017 found the overall condition of the homes was good to fair.
The area, part of the commuter belt east of London, is reliant on its local council for social housing, with more than one in ten homes owned by the authority — twice the national average. The attached rental levels make them the most affordable homes to rent in the borough.
The properties also bring in around £50m for the council’s Housing Revenue Account (HRA) each year.
Following the meeting, Worrall said she was concerned that tenants of homes sold by the council could see their rent increased. She also pointed out that HRA income paid for maintenance work, such as replacing street lights and grass cutting, which benefited both council tenants and the wider community.
“I’m very concerned about what this means for the people of Thurrock,” she said.
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