councils were investing in ‘overnights’ at least as far back as 1983 when I was involved in that market. Relatively risk free And a sensible and efficient way of managing surplus liquidity.I don't think it's as much misappropriation as sneaky sleight of hand.
Over the last few decades central government has devolved more and more to county/local councils quoting the mantra of putting the power to spend where local accountability is.
They've then systematically stripped local government of the funds needed for all those things (care of the elderly/mental health services/schools/special needs/social housing/police/fire services.....) and way, way down towards the bottom of a very long list is roads.
It's also what has been going on with various councils "going bankrupt".
They squeezed funding then in response to the bleating told councils they were sitting on a big pot of money (for wages/schools/mental heath etc) and they should leverage that to improve their income. They were encouraged to invest that in things like overnight investments etc.
Councils, at first, found this a wizard wheeze, money for nothing!
Then Central Government took that into account and squeezed the pips even more, it was so easy as they didn't have to actually "do" anything, just not give them as much in the grant.
Then councils countered by using more risky investments to get the "magic money".
Then it all blew up in their faces.
Oh, and central government had the wizard wheeze of rescuing them using a "deprived areas special grant/fund".
Which miraculously seemed to end up with councils the same shade of blue as the government and not exactly what most might think of as deprived.
Rant mode off, for now
part of the problem is they started investing in higher ventures without proper due diligence - such as the solar farm that went bust as a result of fraudulent trading. Classic case of trying to cut out the experts and doing things on the cheap.