THURROCK Council Leader, Cllr John Kent, has reminded colleagues the council’s building up of £8 million in reserves has proved very prudent.
Speaking at Wednesday (8 January) evening’s meeting of the council’s cabinet, he said: “A year ago when it was suggested that £8 million in reserves was too much for Thurrock, I defended our position by saying we might need one or two million to protect the council from business rate volatility.
“Under the new rules Thurrock now gets a part of all new business rates, but the down side of that is having to share the lost rates too. This has meant the closure of Tilbury Power Station is costing us £2.4 million in 14/15 and £1.6 million every year after that.
“The loss of the power station – plus changes to Lakeside business valuations and lots of businesses appealing their valuation – means there is a hole in our business rates of £4¼ million which is split, more or less, between the government and the council.”
He said: “That’s a best estimate total because so much of it is still up in the air – some appeals will be won, some won’t, for example and we have to estimate the likely outcomes.”
“This does show why it is so important that we keep working on our reserves. Had reserves not risen to a sustainable level in the last three years, had we not worked so hard to find ways of putting money aside as a safety net, then we quite simply would not be in a position to cover these business rate losses.”
He said: “We did make sure we had sensible financial policies; we were prepared, but that doesn’t mean we have to like it.
“I would far rather our funds were used for the specific benefit of Thurrock people rather than support central funding.”
Cllr Kent also spoke about how, during the autumn, the council agreed to lead the way in a four-way business rate pooling proposal with Barking and Dagenham, Havering and Basildon.
He said: “I’m pleased to be able to say the government is backing the plan and – subject to any last-minute hiccups – it should go ahead.
“Just before Christmas the government wrote to us to confirm the necessary designations had been made to enable the proposed pool to be established.
“This is excellent news not just because it highlights what I have been saying for three years – Thurrock Council will work with anybody if we think it gets the best deal for Thurrock people.
“In addition it extends the strength of our partnership working with neighbouring councils around the all-important growth agenda and creates a chance for an estimated £12 million to £13 million of business rates to be kept by local councils.
“About half of that figure will be retained here in Thurrock.
“This is another example of the Council responding quickly, pro-actively and creatively to seize opportunities to bring funding into our borough. We are determined to support local communities and to try and reduce the impact of the centrally imposed savings we have to make over the next four years.
