Flintshire Council could be sued by a local authority in Essex over multi-million pound solar farm losses

Flintshire County Council, already facing the prospect of a £38 million budget deficit for the next financial year, may find itself embroiled in a costly legal dispute.

Essex-based Thurrock Council has named Flintshire among 23 local authorities it plans to sue over allegedly flawed valuations of solar farm investments that led to taxpayer losses of around £200 million.

The dispute revolves around investments made by Thurrock Council in 32 solar farms between 2017 and 2018.

The council relied on valuations provided by the Association for Public Service Excellence (APSE), a non-profit organisation owned by over 250 UK councils, including Flintshire.

Thurrock now claims that APSE provided negligent and inflated valuations that influenced its decision to invest an additional £130 million into the projects.

When the solar farms were sold in 2022, they failed to meet the valuations, resulting in significant financial losses for Thurrock.

These losses contributed to Thurrock Council’s recent financial collapse, prompting the UK government to take over its operations in 2023.

Flintshire’s Financial Challenges

For Flintshire, the timing of this potential lawsuit could not be worse.

The council has already admitted it faces a severe budget shortfall, putting vital public services at risk.

It has been exploring ways to plug the £38 million gap, which is driven by rising inflation, increased demand for social care, and ongoing cuts to central government funding.

Thurrock’s Allegations

Thurrock Council has already initiated legal proceedings against Rockfire Capital, the investment company that owned the solar farms, and its former director, Liam Kavanagh.

Now, it is turning its attention to other councils linked to APSE, claiming they may share liability for the valuations.

According to a report by The Bureau of Investigative Journalism (TBIJ), Thurrock said the 23 councils had been selected “based on having consistent involvement as active members of APSE throughout the period when the valuations were given”.

However, it intends to argue that, if its claim is successful, every member of APSE should be liable.

APSE met with affected council chiefs on Friday morning.

Mo Baines, APSE’s chief executive, told TBIJ they had been “utterly appalled”.

“Thurrock [is] going after a non-profit organisation and other local authorities when everyone knows local government is in dire financial straits.

“Anyone worth their salt … would read this and say, ‘hang on a minute, where is the cost-benefit analysis of pursuing these councils?’

“If that gets to the high court, god knows what the cost would be. It’s throwing good money after bad.”

In its statement to TBIJ, Thurrock said it wanted to find a “constructive solution” with APSE but, without one, would be compelled to sue. It added that relying on APSE’s valuations had left the council without “adequate security” for its investments with Kavanagh between 2017 and 2020.

“It is the council’s view that this has led to significant financial losses to Thurrock, with a negative impact on taxpayers and service users.

“While the council’s primary focus is on recovering money from Mr Kavanagh (and his associated companies), who sought to line his own pockets from the public purse, we also have a duty to pursue those whose actions led to the poor investments.”

The leader of Thurrock, John Kent, said the council would “leave no stone unturned in its attempt to recover public money that was lost through its well-publicised poor investments”.

He added: “Regrettably, the advice that APSE provided on valuation, relied upon by the council, was wrong and gave the council a confidence in its decision to make its investments that did not reflect the reality of the situation.

“We are fully aware of the huge financial pressures facing local government, and we have no desire to increase that burden, but we do need APSE to take responsibility for the advice they provided and to help right those wrongs for the people of Thurrock.”

Flintshire is not the only Welsh council caught up in the dispute. Other councils, including Cardiff and Swansea, are also named as defendants in Thurrock’s legal efforts.

The 23 local authorities that could be sued by Thurrock are: Gedling, Derby, Bolsover, Wolverhampton, South Tyneside, Warrington, Stockton-on-Tees, Preston, West Lindsey, East Riding of Yorkshire, Luton, Isle of Wight, Eastleigh, South Oxfordshire, Hertfordshire, Bournemouth, Christchurch and Poole, Oxfordshire, Bristol, Swansea, Vale of Glamorgan, Cardiff, Southampton and Flintshire.

Flintshire County Council has stated that it will respond to our inquiry regarding Thurrock Council suing the local authority in due course.