Thurrock Exposes Transparency Blind Spot

An investigation by The Bureau of Investigative Journalism (TBIJ) into investments by Thurrock Borough Council has led to the resignation of the Council Leader and the Government has now stepped in and Essex County Council will run their finance team.

TBIJ’s investigation has taken three years and focuses on large investments from multiple councils in firms run by Liam Kavanagh. That the investigation took quite so long has, in large parts, been down to the failure of transparency.

In the UK, and particularly in English Local Government, we are proud of the levels of transparency that are required of local government. All budgets are published, payments above £500 are published, contracts over £25,000 are published, tenders are published and standing orders, council minutes and policies are all published. There is no question that there is a clear intention to give local residents a fulsome insight into the strategies, policies and financial commitments made by each and every Council.

So it has been disappointing to see that the investments that Thurrock Council have made have not been made transparent and don’t appear to require transparency. TBIJ has repeatedly requested data on these investments and after three years was able to report that 150 Councils had invested up to one billion pounds with Thurrock, who’s debt is set to rocket to an eye watering £2bn. The identities of those investors still hasn’t been revealed.

There’s a clear case for making data on investments by public sector bodies transparent. After all, if a Council has to detail a £500 transaction for gardening, then being transparent about a billion pound investment scheme should be routine. It is understandable that public spending on services are exposed to transparency, a resident should be able to know how much is paid for emptying their bins, but if an investment scheme becomes a genuine threat to the financial viability of the institution the risk to services is even greater than a poorly negotiated waste management contract.

We can see from the 1Malaysia Development Berhad scandal as well as corruption in Africa and Latin America, that investments have increasingly become the mechanism through which Governments have corruptly moved money to individuals. Traditional accounts are insufficient to bring true transparency to investment activities, true, structured data on public sector is investments is becoming an urgent requirement if we are to tackle corruption in public administrations.

Gareth Davies, the diligent TBIJ journalist who has broken this story has used our data in the past and we spoke to him about the limits of transparency in relation to Thurrock. That we couldn’t help him showed that a real problem existed, he deserves significant credit for his commitment to this story. My friend and colleague Sanan Mirzoyev has written about the similarities between Malaysia and South Africa here.

For completeness we are making no accusation of corruption in Thurrock, but we shall be watching with interest the conclusion of any investigation into whether there was a breach of any laws.

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Because you read this article, you may be interested in reading UK Left Waiting On Transparency.