Thurrock Council poised to issue financial distress warning

Members of Thurrock Council have been told the authority is poised to issue a section 114 notice

A council with a £469m budget shortfall is to declare itself in financial distress before Christmas, it has emerged.

Members of Thurrock Council in Essex have been told the authority is poised to issue a section 114 notice.

The notice bans the council from making new spending commitments other than for essential and statutory services.

The council's deputy finance officer Jonathan Wilson said: "This is a grave position."

The Conservative-controlled unitary council is in the middle of a "best value inspection and improvement process" carried out by neighbouring Essex County Council, which was appointed as commissioner by the government, the Local Democracy Reporting Service said.

The council's £469m funding gap is about three times the authority's annual budget and means the council would not be able to deliver a balanced budget in 2022-23 without government help.

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The council recently admitted it had effectively written off £275m from its investments, which have a book value of more than £1bn.

Addressing the council's Corporate Overview and Scrutiny Committee, Mr Wilson said: "This is a grave position. There is a £469m deficit being reflected for the current year and a further £184m deficit for the subsequent year.

"That £469m almost entirely relates to investment-related balances.

"So a huge figure to reflect on and we've got very limited mitigation. What that means for the council is we will request exceptional financial support from the government.

"That conversation is ongoing. We will inevitably issue a section 114 notice and that will be before Christmas."