By Local Democracy Reporter
THURROCK Council’s finances are to be scrutinised in a special meeting after it was revealed the authority is in more than £1 billion of debt.
The short-term loans which make up the debt have been largely borrowed from other councils and invested in renewable energy projects outside of the borough.
Opposition councillors have demanded answers about how the debt rose so rapidly and how the council can guarantee taxpayers’ money is not at risk.
The issue will be debated at an Extraordinary Full Council meeting next week, where the Conservative administration is expected to defend the debt due to returns on investments, which has totalled around £30million.
The Tories have credited the investments for helping the borough’s economy survive through the Covid-19 pandemic.
But Labour leader, Councillor John Kent has called the debt, which stood at £1.2billion in January – higher than any other local authority – “deeply worrying”.
The Labour leader also highlighted that the total amount borrowed by the council over several years has been £2.75billion, along with an “eye watering” level of interest payments which have reached £11.93million.
Despite, Mr Kent’s concerns, councillors, including several from the Labour Group, did vote in favour of increasing council borrowing to more than £2billion in a meeting earlier this year.
A report published ahead of the meeting on Wednesday night, said: “The investment approach to generating income to protect council services, began in 2014 and was supported by the unanimous agreement at Full Council of a new investment strategy in October 2017.
“The implementation of this strategy has achieved, and continues to achieve, significant income giving the council the ability to protect services for the most vulnerable in the borough, provide time to reform services, provide additional services that are important to residents, and increase the council’s overall financial resilience.
“This approach has been agreed at Full Council since 2017.”
It continued: “Whilst there has also been significant focus on the council’s level of debt, it is important to remember that the amounts relating to these investments will all be repaid.”
The council’s confidence in the borrowing has not been shared by one local authority which once lent Thurrock money. Edinburgh council loaned Thurrock £20million but saw the risk of lending to the authority as being so high that it officially blacklisted the authority in 2018.
National government guidelines say councils should not borrow more than or in advance of need, purely to profit from investments.