Media coverage has not helped council's financial position says Thurrock's financial guru who has borrowed hundreds of millions
By Neil Speight
16th Nov 2020 | Local News
THURROCK Council's borrowing of more than £1 billion came under scrutiny tonight (Tuesday, 10 November) when the council's financial guru attempted to turn blame for a worsening position of the council's finances partly on the media.
Finance director Sean Clark found himself in the hot seat at this evening's meeting of the council's corporate services overview and scrutiny committee, just days after the authority acknowledged it has had to borrow another £125 million to try and balance its books.
Previously ebullient Mr Clark told the meeting that the council's financial position was on the slide, significantly due to coronavirus, and that it now faced a £34 million budget gap over next three years and would be £19 million short next year.
He advised the committee that the council were: "Examining a number of options, including trying to save £3 million by not replacing jobs."
He went on to say that the council was holding about 200 vacant posts and added: "We are limiting recruitment as much as we possibly can. Going forward there is likely to be a reduction in posts throughout the authority."
However, Mr Clark staunchly defended the council's strategy of borrowing millions to reinvest in potentially profit-making schemes, saying: "In the main all current investment are working well. There are a couple of areas where we under pressure through Covid but our capital is secure."
He then went on to suggest that the council's position in the financial markets has been changed by the intervention of the media, with several local outlets including Thurrock Nub News, and national newspapers questioning the council's activities.
He told councillors: "Covid pressure and uncertainties led to some local authorities not lending to us. Every time there has been negative press overage, some bodies have removed Thurrock from their lending risk. They do not wish to be the next ones in the next story."
Mr Clark downplayed the council's borrowing position and said that the latest loan it took out was "not new borrowing, but refinancing. It will come to the standards and audit committee later this year".
He did concede that the new borrowing from the Public Loan Board, which took the council's deficit close to the £1.5 billion mark came with an additional cost. "The profit that we have been making is now slightly diluted" he said.
And he forecast that things might get worse, telling councillors: "How bad will the winter be? That is unknown to us at the moment. I would not expect it to get much better, I suspect it will get slightly worse."
But he said that the council's financial position was protected by its reserves, saying: "We have financial resilience in our reserves. We would keep those reserves until we had to use them."
He was asked by committee chair Cllr Oliver Gerrish is the council had been the possible architect of its own downfall, saying: "Are we short because we didn't have a great plan B."
Mr Clark responded by saying: "Plan B has always been running alongside Plan A." And he said the ruling Conservative group were in full accord with what was happening, saying: "Cllr (Shane) Hebb has always been quite clear that we are doing this to buy time to review all council services to see what services we are delivering."
However, he conceded that is was likely that there would be job cuts at the council, saying: "Going forward there is likely to be a reduction in posts throughout the authority – though he added: "At this stage no redundancies are planned."
Mr Clark was quizzed by Cllr Gerrish about the overspends on the A13 road widening project and the botched Stanford rail station project, but declined to give details, saying the council was reviewing its position but did say that any balances outstanding would have to be paid for by "borrowing or capital receipts" – suggesting that council taxpayers may well have to pick up the tab for the council's blundering.