EXCLUSIVE

THURROCK Council has announced that it is going to become 'a smaller council' and will be cutting back on the services it provides.

The news comes in the wake of growing concern over the authority's financial position and the statement, made exclusively to Thurrock Nub News by the council, says it will offer less than it does now.

That could mean an end to the council funding for extra police in the borough and a reduction in the council's flagship cleaner and greener policies.

Over recent weeks as the impact of Covid-19 and a reduction in the returns from the council's controversial borrowing policies which has seen it rack up a debt of almost £1.4 billion, began to bite fears have been growing about the council's position going forward.

Across the country many councils are reeling under the financial strain – with some close to bankruptcy - but Thurrock has always been upbeat and bullish about its financial situation.

However, in the wake of last week's spending review by Chancellor Rishi Sunak Thurrock Nub News again pressed the council about its financial position, particularly with the relation to its policy of borrowing in advance of need.

The council has access to low rates of borrowing, including from the Public Works Loan Board and has taken advantage of that to borrow money, which it then either uses to buy into investment projects or lends to other organisations, including other councils.

In his spending review Mr Sunak stressed that similar it was not to the government's liking and, going forwards, councils will be expected to demonstrate their capital plans do not include any borrowing to buy assets purely to produce a yield.

That appears to have put a rather large spoke into the council's financial strategy so we asked for clarification from the council about its plans and received the following statement which reads:

"Thurrock's investment approach has differed to other councils, and isn't directly comparable. Instead of favouring property purchases like other councils have, Thurrock invested in relatively short-term asset-backed, non-ownership bonds, largely in the renewable energy sector.

"The approach has continued to work nine months after the start of a global pandemic, and was previously unanimously supported by Full Council in 2017, 2018 and 2019.

"For the last six years in a row independent external auditors have found that the council's financial reporting and accounts are sound, that Thurrock has strong value for money plans in place and given unmodified approval to the council's books.

"The approach was designed to give time and space to reform services, and was never a permanent feature of the council's financial plan. It has brought in around £70 million additional money to give time to reform services and to fund non-statutory, public priorities – such as extra police officers, visible environmental improvements and fighting anti-social behaviour.

"With changes to the market and circumstances, this means that the approach will wind down more quickly than originally planned – this means additional non-statutory services which have been financed from the approach can no longer continue, and the council will now become a smaller council sooner and it will offer less than it does now.

"The Treasury Guidance has not prevented local authorities borrowing to invest, instead it is a restriction on the Public Works Loan Board lending money to any local authority that has an intention to buy any new investment assets for yield. Other funding sources for investments are still available, still permissible and this doesn't account for previous investment activity.

"With regards to Borrowing in Advance of Need, the council's borrowing has been taken out within the statutory regulations allowed."

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