The Financial Reporting Council has opened an investigation into the conduct of one of its members at Thurrock Council concerning the financial management of the authority’s failed investment strategies.
The financial regulator is investigating the accountant’s conduct in complying with governance, reporting, regulations and professional standards relating to Thurrock Council’s operations and investment activities for the financial years ended 31 March 2018 to 31 March 2022.
The Financial Reporting Council (FRC) stressed that the investigation does not relate to any persons other than the relevant member and that “it would not be fair to treat any part of this announcement as constituting or evidencing an investigation into any other persons or entities”.
The investigation will be conducted by the FRC’s Executive Counsel under the Accountancy Scheme following a decision made at a meeting of the FRC’s Conduct Committee on 21 November 2023.
The collapse of Thurrock Council’s financial investment strategy led to significant financial loss for the authority and saw it being placed under government intervention in September 2022, with a section 114 notice issued later that year.
Thurrock said that throughout the intervention process, it had been updating the police and financial regulatory authorities about “emerging evidence into what happened to lead to the extreme financial difficulties”.
Andrew Jefferies, leader of Thurrock Council, welcomed the FRC investigation. “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,” he said.
“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.
“This shows our commitment to being open and doing whatever we can to address what happened before.”
Jefferies said the council was “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,” he added.
Dave Smith, chief executive and managing director commissioner, commented: “The council is undergoing essential change to make it fit for the future. We will learn from the lessons of the past to ensure we become the best council we can be – an efficient and accountable council that our residents deserve.
“The FRC investigation is an important step in understanding the issues the council faced as we work at pace on delivering improvements that will make a real difference for the people we serve.”
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