Thurrock allowed to obtain Public Works Loan Board funding after its ability to use intra-authority borrowing market contracts significantly
Thurrock Council has secured access to Public Works Loan Board (PWLB) funding after identifying it requires £836m in short-term funding to meet its forthcoming cashflow requirements.
The move followed dialogue betweeen the council, its recently appointed Commissioners, and the Department for Levelling Up, Housing and Communities.
A briefing note presented to the authority's Corporate Overview & Scrutiny Committee yesterday (6 October) revealed that, following the Government's intervention last month, Thurrock has found that its access to the inter-authority borrowing market, through which from 2010 onwards it had largely funded its capital programme and investment strategy, had "contracted significantly".
Essex County Council was subsequently appointed as Commissioner and Best Value Inspector, meaning it is exercising Thurrock's strategic financial functions.
According to the briefing note, funding from the inter-authority market typically provides access to short-term funding (funding taken for up to one year) at rates lower than equivalent PWLB rates. By the end of the 2021/22 financial year, short-term funding made up £1.162bn of the total £1.452bn debt held by the council.
Consequently, the council has sought an urgent solution in order to meet its debt repayments in accordance with the agreed contractual arrangements.
As part of the effort, the council and the Commissioners assessed the funding requirements of the council up to the end of the current financial year (to 31 March 2023).
"This confirmed that a total of £836m of short-term funding that was required to meet forthcoming cashflow requirements including the replacement of existing loans from counterparties in the inter-authority market total £687.5m of the total with the replacement of existing PWLB loans representing the balance. £177.5m has been repaid as at the 4 October 2022," the briefing note reads.
The Department for Levelling Up, Housing and Communities has now agreed Thurrock's funding strategy. "This is taken as a series of loans over one year which also supports the wider objective of providing further time for the Council to develop a response to the following specific directions of the Secretary of State", the briefing note said.
Adam Carey
