A £15m loan from a North East council to a troubled Essex authority in dire financial straits has been repaid with interest, bosses say.
Thurrock Council announced this week that it was effectively bankrupt, issuing a section 114 notice to bar itself from making any non-essential spending as it grapples with a £469m funding black hole. It emerged recently that Newcastle City Council was among a number owed money by Conservative-run Thurrock, which it has been reported has amassed a vast total of £1.5bn in borrowing debt – including £900m in short-term loans from other councils.
That has sparked questions over why such a large amount of money would be loaned to a council in such fiscal distress, when Newcastle itself has been forced to make major budget cuts totalling more than £300m since 2010. Lib Dem councillor Colin Ferguson, deputy leader of the city’s opposition party, said this week that the £15m given to Thurrock “sticks out like a sore thumb” in the council’s finances and demanded to know what civic centre Labour chiefs knew about Thurrock’s financial distress before issuing the loan.
