The Sussex councils which loaned £72m to an Essex borough

Five councils in the county and the Sussex Police and Crime Commissioner lent the money to Thurrock Council between April 2016 and November 2019, according to figures obtained by The Argus and the Bureau of Investigative Journalism.

The Essex authority borrowed £1.1 billion from 150 councils across the country during this period. At the last count it has invested at least £604 million commercially in the solar energy sector.

Of the six Sussex authorities which lent money to Thurrock, none said they knew what the council planned to spend the money on. It is not known whether any money loaned by Sussex councils was spent on Thurrock’s commercial investments.

Thurrock Council borrowed more than £1 billion in three years. Photo: Robin Webster

The £72 million total included:

• West Sussex County Council loaned £30 million to Thurrock in three separate £10 million loans. £20 million of this is still outstanding.
• Lewes District Council loaned £15 million.
• Crawley Borough Council loaned £13 million in three separate deals.
• Brighton and Hove City Council loaned £5 million.
• Chichester District Council loaned at least £5 million.
• The Sussex Police and Crime Commissioner lent £4 million. When contacted by The Argus a spokeswoman insisted this was a “short-term deposit and not a loan”.

All six authorities said councils loaning money to other councils was common practice.

But a spokeswoman for finance experts the Chartered Institute of Public Finance and Accounting said councils should strike a balance between risk and responsibility.

“The priority for treasury management is to protect capital rather than to maximise return,” she said.

“There is generally more certainty and less risk lending to a peer organisation. A balance must be struck with a keen responsibility for public money.”

Crawley Borough Council leader Councillor Peter Lamb insisted loaning money to other councils is one of the safest ways to invest public money

Crawley Borough Council leader Peter Lamb told The Argus loans to other councils was “one of the safest ways” to invest public money.

“All councils, even those heavily in debt, can have tens of millions of pounds in their accounts at any one time,” he said. “Rather than just leaving it in the bank, for both safety and to maximise its benefits to the taxpayer, the money is invested in a range of ways.”

A Brighton and Hove City Council spokesman said it was Thurrock Council’s business to decide what it spent the loans on.

“Thurrock may be utilising this money to support their cash flows, which may include the solar power scheme, but this is a completely unrelated decision and a matter for Thurrock to comment on,” he said.

“The terms of our maturity loan are very standard, are unrelated to the solar power scheme, and are therefore not reliant on its success or otherwise.”

Brighton and Hove City Council said it was up to Thurrock Council on what it spent its loan on

This was echoed by Chichester District Council. “We do not know what individual councils use the money for as it is for them to do so in line with their approved policies,” a spokeswoman said.

Lewes District Council said: “Lending to other local authorities is very common and a key part of most, if not all, councils’ treasury management policy and practice.” And a Sussex Police and Crime Commissioner spokeswoman said: “Surplus monies are invested at low risk, with due consideration to security of capital, liquidity and rate of return.”

A West Sussex County Council spokeswoman said: “Loans to other UK local authorities are made in accordance with the Council’s approved treasury management strategy.”

Thurrock Council said its investments “continue to provide significant income”.

It said: “All investments are consistent with the agreed strategic approach and within agreed borrowing parameters as set and reviewed by full council. Inter-local authority borrowing is common practice and provides both the lender and borrower with financial benefits.”