Thurrock Council issues S114 notice of financial distress

Chief executive Lyn Carpenter and council leader Rob Gledhill both resigned from their positions at Thurrock Council

A Conservative-run council with a £469m funding black hole has declared itself in financial distress and barred itself from making any non-essential spending.

The acting director of finance at Thurrock Council in Essex has issued a section 114 notice.

It means a local authority is in financial distress, cannot balance its budget and is effectively bankrupt.

The council, which has seen resignations at the top, said it was seeking financial help from government.

"Today is a very worrying day but I see this as the start of our recovery," said the council's Conservative leader Mark Coxshall.

"Now we must look forward at how we can make a bright future for Thurrock.

"I am absolutely determined to make that happen with tough decisions and working with all our council's staff to do the right thing to get this council back on its feet."

Thurrock Council's current funding gap is more than three times larger than its annual budget

Over the course of several years, Thurrock Council provided £655m to companies via bonds which included the purchasing of 53 solar farms.

Evidence obtained by The Bureau of Investigative Journalism (TBIJ), and seen by the BBC, revealed that, in March 2018, financial advisors wrote to the council's former corporate director of resources to express concern about the authority's "extreme" appetite for risk.

The council paused its investment policy in September 2020, and two years later, the government said it was intervening because of the "serious financial situation" and it appointed neighbouring Essex County Council as "commissioner" for Thurrock, which meant it oversaw any new spending.

At the time, council leader Rob Gledhill resigned, saying "the political buck stops with me".

The local authority's chief executive Lyn Carpenter, who had been on extended leave since the government intervention, announced her resignation last week.

Analysis

by Simon Dedman, BBC Essex political correspondent

Issuing the S114 notice formalises what we know - that Thurrock Council is in a perilous position financially.

It is part of the process of asking the government for financial support to get itself out of a huge £469m budgetary hole this year.

Things like cleaning streets, collecting rubbish and providing social services will still be carried out because they are among the services that Thurrock has a statutory obligation to provide.

There can be no spending on, say, a brand new playground.

Thurrock is going to have to accelerate looking at selling off assets, like land, housing and its theatre, which comedian Russell Brand recently spoke out in support of saving.

The council's financial shortfall is one of the largest ever reported by a UK local authority.

Croydon, Slough and Northamptonshire have also issued section 114 notices in recent years.

John Kent, the former leader of the council and current leader of the opposition Labour group, said staff would be fearing for their jobs and vulnerable people fearing for the "services they rely on".

"This disaster has been made and delivered by Thurrock Conservatives and it's high time they accept responsibility for their actions and resign," he said.

Mr Coxshall however said "residents and staff should feel safe" knowing that essential services such as street lighting, road gritting and social care would continue.

A full council meeting was scheduled for 9 January 2023.

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