Financially troubled Thurrock Council issues section 114 notice

Thurrock Council has effectively declared bankruptcy by issuing a section 114 notice due to a "grave" financial position that has left the local authority with a £470 million in-year funding gap.

The decision to issue the notice follows the publication of a bleak report prepared by council officers last month that revealed the funding gap was the result of financial losses from the council's investments and due to the need to repay investment debt.

The council issued the s114 notice yesterday (19 December) as it cannot deliver a balanced budget in the circumstances.

Once a s114 notice is issued, councils can request additional financial assistance from the Government. It also means the council has to stop all but the essential spending needed to provide vital services, pay staff and meet its legal duties.

Cllr Mark Coxshall, Leader of Thurrock Council, said: "I have already made it clear as the incoming Leader that I have been shocked by the position the council is in and we do not take lightly the seriousness of the step we are being asked to take today."

Cllr Graham Snell, Cabinet Member for Finance, added that the issuing of the notice by the council's most senior financial officer "has our full backing".

The council's finances have been the subject of media scrutiny since the Bureau of Investigative Journalism (BIJ) published details of the council's investments in a solar farm business earlier this year.

In September, the Government decided to intervene, citing financial and commercial risks and the "seriousness" of allegations made about the council's financial decisions.

Since then, Essex County Council has been acting as Thurrock's Commissioner and Best Value Inspector, meaning it is exercising Thurrock's strategic financial functions.

Commenting on the s114 notice, Thurrock's Commissioners said: "The issuing of a Section 114 notice is a necessary next step for Thurrock Council to take to address its overall financial position, alongside seeking further financial support from the Government.

"The Section 114 notice will limit non-essential spending, which is an important element contributing to the stabilising of the council's finances. Our work with Thurrock to address wider structural budget issues continues in tandem with work on their day-to-day spending."

Essex's Best Value Inspection team is due to report its findings to the Government by 17 February 2023, having agreed on an extension to the original deadline of 3 January 2023.

The s114 notice follows the resignation of the council's Chief Executive of seven years, Lyn Carpenter, last week.

Thurrock plans to hire a new Chief Executive in the new year.

Adam Carey