Thurrock BC will reduce its ‘over-reliance’ on borrowing from other councils by taking out £836m of loans from the Public Works Loan Board (PWLB).
The council has largely funded its capital programme and investment strategy through the inter-authority borrowing market since 2010, with other councils lending Thurrock hundreds of millions of pounds and generally charging less interest than the PWLB.
But last month the Government appointed Essex CC as Best Value inspector and commissioner overseeing Thurrock’s finance and governance functions.
A report to a meeting of Thurrock’s corporate overview and scrutiny committee tomorrow said the intervention ‘contracted’ the council’s access to the inter-authority market and ‘significantly increased the refinancing risk,’ leaving £836m of short-term funding to ‘meet forthcoming cash flow requirements’.
The Department for Levelling Up, Housing and Communities has now agreed to allow Thurrock to switch its borrowing from other local authorities to the PWLB over the next few months as an ‘urgent solution’ that will allow the council to meet its debt repayments.
Thurrock officers wrote: ‘Agreement of the process provides certainty over loan funding and enables certainty to be provided to existing counterparties in the sector over the security of their funds.’
