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Bankrupt Thurrock Council asks for £636m bailout and tax hike

Stuart Woodward/BBC Thurrock Council buildingStuart Woodward/BBC
Thurrock Council issued a section 114 notice in December effectively declaring bankruptcy

A council that is effectively bankrupt is in talks with government to borrow up to £636m to help balance its books.

Thurrock Council in Essex has a £1.5bn debt following a series of high-risk investments.

The Conservative-run unitary local authority is also due to find out whether Westminster will allow it to increase council tax by more than 5%.

The Labour opposition leader said the government loan would only serve as a "sticking plaster".

Simon Dedman/BBC Graham Snell of Thurrock CouncilSimon Dedman/BBC
Conservative cabinet member for finance Graham Snell said the council would like to increase its share of tax from residents

Thurrock has asked for an initial £182.5m from the Treasury to prop up its budget for 2023-24.

The loaned funds would end up accounting for 57% of its spending.

The council however hoped to recoup at least £475m from the solar farms it started purchasing in 2018.

Bins at Tilbury, Essex
An initial government loan of £182.5m would account for 57% of budget spending next year in Thurrock, including for bin collections, pictured in Tilbury

Last year, the Conservative government's Chancellor of the Exchequer, Jeremy Hunt, said councils could only increase their share of tax on residents by 4.99%, but an exception was expected to be made for Thurrock.

The council's cabinet member for finance, Graham Snell, said: "There's no point beating around the bush with that; we would be prepared to go above the 5% should the government allow us to do that."

Thurrock has the largest funding deficit of any local authority in England.

Simon Dedman/BBC Russell Brand talking at Thameside Theatre, Grays, EssexSimon Dedman/BBC
About 450 people attended the Thameside Theatre in Grays in December to watch Russell Brand, who grew up locally, campaigning over the venue's future

The £636m bailout figure being discussed with government was revealed at an overview and scrutiny committee meeting at Thurrock on Thursday.

Labour opposition leader John Kent said: "This is only forestalling the day when you actually have to do something decisive to solve this problem.

"These sticking plasters just won't do."

Mr Kent said he was worried the council would sell its assets, such as scout halls and community halls, and he asked that they be transferred to community ownership.

A decision is yet to be made over the ownership of the Thameside complex in Grays, which includes a 300-seat theatre, museum, community space and library.

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