Thurrock Council issues S114 notice of financial distress

1 year ago 36

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A Conservative-run council with a £469m funding black hole has declared itself in financial distress and barred itself from making any non-essential spending.

The acting director of finance at Thurrock Council in Essex has issued a section 114 notice.

It means a local authority is in financial distress, cannot balance its budget and is effectively bankrupt.

The council, which has seen resignations at the top, said it was seeking financial help from government.

"Today is a very worrying day but I see this as the start of our recovery," said the council's Conservative leader Mark Coxshall.

"Now we must look forward at how we can make a bright future for Thurrock.

"I am absolutely determined to make that happen with tough decisions and working with all our council's staff to do the right thing to get this council back on its feet."

Image caption,

Thurrock Council's current funding gap is more than three times larger than its annual budget

Over the course of several years, Thurrock Council provided £655m to companies via bonds which included the purchasing of 53 solar farms.

Evidence obtained by The Bureau of Investigative Journalism (TBIJ), and seen by the BBC, revealed that, in March 2018, financial advisors wrote to the council's former corporate director of resources to express concern about the authority's "extreme" appetite for risk.

The council paused its investment policy in September 2020, and two years later, the government said it was intervening because of the "serious financial situation" and it appointed neighbouring Essex County Council as "commissioner" for Thurrock, which meant it oversaw any new spending.

At the time, council leader Rob Gledhill resigned, saying "the political buck stops with me".

The local authority's chief executive Lyn Carpenter, who had been on extended leave since the government intervention, announced her resignation last week.

Media caption,

Thurrock Council is seeking "exceptional financial support" from government

The council's financial shortfall is one of the largest ever reported by a UK local authority.

Croydon, Slough and Northamptonshire have also issued section 114 notices in recent years.

Mr Coxshall also said "residents and staff should feel safe" knowing that essential services such as street lighting, road gritting and social care would continue.

A full council meeting was scheduled for 9 January 2023.

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