'Bankrupt' council needs to borrow extra £26m

Thurrock Council was effectively declared bankrupt after it made a series of failed investments

A local authority that is effectively bankrupt needs to borrow £206.7m from the government to balance its 2023-24 budget, a report revealed.

Thurrock Council had initially planned to borrow £180.2m but a provisional financial outturn report suggested an extra £26m was needed.

The government appointed commissioners to oversee the council after a series of bad investments damaged its finances.

Responding to the report, the commissioners said the secretary of state was "minded to approve" the extra financial support package.

However, the council was warned its borrowing must not exceed £234.5m for the year.

The secretary of state said a "significant" amount was already being offered, but said Thurrock Council had "delivered on its saving plans" so far.

John Kent was sworn in as the new Labour leader of the council in May

The authority raised its council tax by 8% in February, following a 10% hike in 2023.

Commissioners said despite the rises, a high collection rate of 98% remained.

“Clearly continuing to sustain both savings plans and income raising strategies are a cornerstone to future sustainability," they added.

The council was effectively declared bankrupt in 2022 after it borrowed £1.5bn to invest in green energy companies.

It was taken over by Labour during the local elections in May after the party won 27 seats.

Speaking at the time, leader John Kent said debt levels remained at more than £400m.