Bankrupt Thurrock Council can raise council tax by 9.99%

Thurrock Council has been given permission by government to raise its council tax to 9.99% without holding a residents referendum

A local authority facing bankruptcy has been allowed to raise council tax by almost 10% without holding a referendum of residents first.

Thurrock Council was granted permission by the levelling up minister to raise the tax by an extra 5% to 9.99%.

The Conservative-run unitary authority in Essex has a £1.5bn debt following a series of high-risk investments.

The Labour group leader had said his party would not support any increase above 5% without a referendum.

Michael Gove, Secretary of State for Levelling Up, Housing and Communities, has also granted Croydon and Slough permission to raise their council tax bills beyond this year's legal limit of 4.99%.

Mr Gove said he recognised Thurrock residents would have to find hundreds of pounds more and blamed "failures in their local leadership" by the Conservative-run council.

He added he was conscious of the impact on local taxpayers, particularly those on low incomes, of having to foot part of the bill for their councils' "very significant failings".

Thurrock had asked for an initial £182.5m from the Treasury to prop up its budget for 2023-24, projected to be £319.8m, but yet to be approved.

The loaned funds would end up accounting for 57% of its spending.

The council however hoped to recoup at least £475m from the solar farms it started purchasing in 2018.

An initial government loan of £182.5m would account for 57% of budget spending next year in Thurrock, including for bin collections, pictured in Tilbury

John Kent, leader of the Labour group, said it was unfair that residents had to pick up the tab for the council's mismanagement, according to the Local Democracy Reporting Service.

"Thurrock Tories are to be allowed to increase council tax by 10% to pay for their poor decision-making," he said.

"Labour won't back any increase over the 5% cap level without a referendum.

"It is the Tories who crashed the council, not the residents."

The administration did not respond when asked whether it would implement the full increase but a council spokesman said: "Thurrock Council welcomes the additional flexibility the government has given it in setting council tax this year.

"Decisions about council tax will be made when full council meets to set the 2023-24 budget."

Thurrock has the largest funding deficit of any local authority in England.

The bankrupt council is undergoing a best value inspection by Essex County Council commissioners in the wake of investments in green technology using millions of pounds of loans from other councils across the country.