THURROCK Council's deficit has risen by more than 500 per cent in just seven months due to the massive economic impact of Covid-19.

Council papers have revealed that in February the council was expecting to have a funding gap of £5.5 million over the next four years but that has now risen to £33.6 million – an increase of £27.4 million.

It is claimed the reason is "reductions in locally raised taxes, increased costs – especially around social care resilience – and expected reductions in fees and charges" caused by the Covid-19 pandemic.

It is also down to the council's decision to pause some of its major capital projects, which are linked to improving infrastructure.

That pause of capital project is said to make up £11 million of the total deficit and is said to have taken place due to "new investment market opportunities reducing" and to give additional time for funds to be raised for the council-owned development firm, Thurrock Regeneration Limited.

The forecast budget deficit for next year alone is £19.3 million.

There are further fears this will grow by another £1.5 million in the coming months. This is due to financial risks linked to instability in residential care homes, as well as a potential spike in homelessness when the landlord eviction ban is lifted and the need for changes to school transport due to social distancing.

The papers, published ahead of a cabinet meeting next week, go on to note the council's theatre income will also be hit following the cancellation of its pantomime – [L+] https://thurrock.nub.news/n/the-show-won39t-go-on---it39s-snow-go-for-panto [L+]announced yesterday (Monday, 8 September)[.L].

Thurrock recently came under heavy scrutiny from opposition councillors and the media over its short-term debt which has reached more than £1 billion and is set to grow to more than £2 billion over the next five years.

Most of this debt is the result of a strategy to borrow from other councils and invest the cash into renewable energy projects outside of the borough.

The council report notes "existing investments have continued to perform as anticipated despite Covid-19" and states they have helped deliver improved services for residents.

The council is already looking to cut back on it expenditure and a number of cuts are expected. Already the council has axed funding for the popular Thurrock Community Choir and it is expected that other non essential services may be pruned or cut completely.