A GOVERNMENT minister has sent a scathing letter about ‘novel and risky’ financial strategies just weeks after intervening in BCP Council’s beach huts plan.

Levelling-up secretary Greg Clark MP sent a letter to firms offering councils commercial advice last week.

Although it does not mention BCP Council by name, it does refer explicitly to a loophole which the minister closed recently, saying “it concerns me that this was necessary”.

In his letter of August 19, he said: “I am writing to you as I have concerns that some local authorities are engaging in risky commercial practices, which are putting taxpayers’ money at risk.

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“I know that many local authorities engage with consultants and advisors to bring in the necessary expertise and support for a range of reasons, including asset management, financial and accounting advice and to support operational improvements.

“I recognise the need for local government to draw on expertise and specialist advice, and that this is both necessary and can have significant benefits.

“I am concerned, however, that some authorities look for strategies that push at the bounds of what is permitted, and sometimes seek external advice and support to implement novel and risky strategies.

“I recently closed a loophole in the powers afforded to councils for the flexible use of capital receipts; it concerns me that this was necessary.

“I would like to be able to trust councils to follow the spirit as well as the letter of the law, and to act prudently with public money.

“I am, however, concerned that some councils are spending taxpayers’ money on external advice to engage in practices that may put public money and service delivery at risk.”

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Three weeks ago, Mr Clark stepped in to call a halt BCP Council’s intention to create a majority or wholly owned company which would have bought thousands of huts to fund transformation.

At the time he said: “It’s not right that some councils have attempted to abuse a loophole to do dodgy deals which only benefit the bottom lines of consultancies and accounting firms.

“That’s why we are cracking down on accounting practices that put taxpayer cash at risk.”

In his latest letter, he added: “To be clear, I recognise that many councils and advisors will be engaged in sensible, prudent activity. However, I hope that you will agree with me that companies should not seek to gain by helping councils pursue strategies that engage in risky financial practice.

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“This includes where local authorities are taking excessive risks with novel strategies or looking for ways to circumvent statutory bounds that are designed to constrain risk. Council officers and members must also take seriously their responsibilities, and not waste money by pursuing strategies that the government then must intervene to prevent.”

Former council leader and Lib Dem group leader, Cllr Vikki Slade said: “When I was sent the letter, I was embarrassed to be associated with BCP Council.

“There needs to be some humility from those who have put us in this position.”

A BCP Council spokesperson said: “Over the last few months, we have been working with the council leadership to explore various ways to make the most of BCP Council assets, including getting independent advice where appropriate.

"We have also supported discussions with the Department of Levelling Up, Housing and Communities (DLUHC) and the Council Leadership, and have made an application to DLUHC for a capitalisation direction to fund our transformation programme.”