Thurrock Council repays £10m loans from Cambridge City Council

Thurrock Council has repaid £10m of a £15m debt to Cambridge City Council

A debt-ridden Essex council has repaid £10m to another local authority.

Last week, Thurrock Council was given permission to borrow almost £850m from government so it could pay back loans to other local authorities.

It has paid Cambridge City Council part of its debt, but still owes it £5m.

The government appointed commissioners to take over Thurrock Council's finances last month, after concerns were raised about its commercial investments.

It had reportedly amassed £1.5bn in borrowing debt, which included £900m in short-term loans from other local authorities, said the Local Democracy Reporting Service.

At the time, three authorities in Cambridgeshire confirmed they had outstanding loans to Thurrock Council.

• Debt-ridden council owes other authorities millions

• Council set to borrow nearly £850m to repay debts

• Tory council leader resigns as government steps in

At a meeting of the Strategy and Resources Scrutiny Committee, the head of finance for Cambridge City Council said two loans totalling £10m had been repaid over the last few weeks.

It expected the remaining £5m to be repaid in December.

Caroline Ryba, the council's head of finance, said she was "as close to 100% sure as you can get" that the rest of the money would be repaid.

She explained that the city council had lent to Thurrock before and had always received the money back, and said all local authorities were seen as being low risk to lend to.

Simon Smith, a Labour councillor for Cambridge's Castle Ward, said the "optics" of the situation had not looked good and said he questioned whether it had been "sensible" to have £15m on loan to Thurrock at one time.

Thurrock is to borrow £836m in weekly instalments from the Public Works Loan Board (PWLB) up until 16 March.

Of this, £678.5m will be repaid to other local authorities.