Government won't wipe all our debt, says council

A council that was effectively declared bankrupt has said the government will never write off all of its debt.

Thurrock Council in Essex racked up a debt of £1.5bn by borrowing hundreds of millions for investments in solar farms that went wrong.

On Wednesday, the local authority said a portion of debt would be swallowed up by whichever new council replaces Thurrock as part of local government reform.

"[The government] are not in a million years going to wipe off the whole of the debt of Thurrock," said Valerie Morris-Cook, the Labour cabinet member for finance.

"But they are looking at what they can do for us and we are working very, very closely for months with them to see what is the number that would actually help Thurrock and enable us to be sustainable when we become part of local government reform."

The structure of 15 councils in Essex is due to be reduced to somewhere between three and five all-purpose unitary authorities.

Thurrock is likely to merge with some of its neighbours.

It could be grouped with Basildon, Castle Point, Southend, Rochford, Harlow, Epping Forest or Brentwood - depending on which proposal is agreed.

After the cabinet meeting on Wednesday, Thurrock Council leader Lynn Worrall said "whoever we go with there's going to be a proportion of our debt that goes with us".

"We will not get all our debt written off. We will get a proportion," she said.

"But we are still answering Treasury questions on how we can reduce our debt further."

Former Local Government Minister Jim McMahon told Parliament in the summer that Thurrock would be provided an "initial tranche of financial support" in 2026-27.

The council has asked Westminster for £64m to help balance the books next year. The government has been approached for a comment.

Thurrock Council, under the former Conservative administration, issued a Section 114 notice in December 2022 - effectively declaring itself bankrupt.

The debt, from £1.5bn, has been reduced to £677m according to the latest budget papers.

On Wednesday night, the council's cabinet agreed to increase council tax by 4.99% in April.

The authority has a savings plan totalling £13.9m, with measures including:

• £2.7m from adult social care in part, it says, by "strengthening the reablement offer and greater use of technology"
• £1.5m from children's social care
• A £1.5m reduction in pension contributions

Independent councillor Neil Speight told cabinet there had been "very fluffy answers" on the detail of the cuts.

Morris-Cook said the public would not see a reduction in services and the savings would be detailed by the responsible cabinet member.

A full council meeting will discuss and vote on the budget measures in February.

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