THURROCK Council has been allowed to borrow £836 million to ensure it meets its obligation to pay back money loaned to it from local authorities, pension funds and other public bodies.
The payback process to some of those councils, where concern had been expressed about Thurrock possibly defaulting on its loans, began recently – with Cambridge City Council being one of the first to get weighed in – to the tune of £15 million. As of today, approx £177.5m has been paid back – around a quarter of the total debt it accumulated to other public bodies.
In total it is believed Thurrock owed councils, pension funds and other authorities £678.5 million – borrowed to fund investments in ‘green energy’ companies. Many of those companies have either gone bust or are failing and unable to repay the bonds Thurrock bought to finance them. Nub News, which exclusely revealed the amount of Thurrck billion plus debt mountain in January 2021, understands that upwards of £100 million – and possibly as much as double that – could have to be written off.
In a bid to stave off any possible financial implications for other councils and public bodies should Thurrock not to be able to pay them back because of its failed investments, the government has brokered a deal with the Public Works Loan Board*, which amounts to Thurrock striking a new loan of £836 million. The additional £217.5 million is the money Thurrock already owed the board that has been written into the new deal.
It is not known at what rate of interest Thurrock has been able to borrow, but it is likely to be below current commercial rates. The new loan will run over a year – giving the council ‘breathing space to get its house in order and come up with government approved plans to find a long term solution to its cash quandary.
However, it is still going to amount to a huge amount of interest – fresh money that effectively comes out of Thurrock council taxpayers’ pockets on top of the hundreds of millions already lost, squandered or unaccounted for in the financial shambles that originated out of the council’s controversial ‘borrow to invest policy’.
The implications of that loss have been described as ‘catastrophic’ by the council’s acting CEO Ian Wake who was recently appointed as the Government stepped in to stop the rot.
So while there is good news for many of the council listed below (together with the amounts they loaned Thurrock) who now know they will get their money and interest back, this is another more dire news for Thurrock Council – whose CEO Lyn Carpenter and finance director have both been put on leave while the commissioner appointed by the government continues to drill down into the quagmire of dodgy deals and deceit left behind.