Northampton taxpayers can breathe sigh of relief after £8million invested in bankrupt council has been repaid

West Northants Council (WNC) has confirmed £8million has been returned after lending it to a council which is in financial turmoil.

In December, this newspaper revealed via a freedom of information request that WNC had £8million invested in the now effectively bankrupt Thurrock Council.

One investment was for £5million which was deposited to the Conservative-led Thurrock Council on August 1 2022, and another for £3million which was deposited on September 16 2022.

WNC said to Chron and Echo in March that it was not aware of any risk of the investment not being repaid.

Cllr Malcolm Longley, WNC’s cabinet member for finance, previously said: "WNC’s investment in Thurrock Council is in line with our investment policy, as agreed by full council. It has been highlighted widely that Thurrock Council will be putting in place arrangements to repay any short-term borrowings they have taken out and we are not aware of any risk of the investment not being repaid to us when it becomes due. Local authorities are essentially underwritten by the Government."

A recent investigation by the BBC and Bureau of Investigative Journalism discovered that a businessman cheated Thurrock Council out of tens of millions of pounds and went on a spending spree with the cash.

Leaked documents reveal how Liam Kavanagh used Thurrock Council's money to buy luxury goods, including a yacht and a private jet, according to BBC’s Panorama programme.

The council has been made effectively bankrupt after investing £655m in Mr Kavanagh's solar farm business, reports BBC.

Mr Kavanagh's lawyers say all the payments were permissible, according to the BBC.

Following these revelations, this newspaper asked WNC if the money invested in Thurrock Council had been repaid.

The £5million investment was supposed to mature on May 2 while the £3million investment was supposed to mature on June 16.

Cllr Malcolm Longley said: “WNC’s investments in Thurrock Council were in line with our investment policy, as agreed by full council. Both investments reached maturity earlier this year and as expected were returned to the council in line with the original agreement.”

The Government says it has reportedly offered Thurrock financial help. It has also established the Office for Local Government to improve accountability, help detect emerging risks of failure and support local authorities, according to the BBC.

Thurrock Council has also been forced to cut services and put up council tax.