Councillor Hebb introduced the report and stated that there had recently been un-contextualised reports in local media outlets regarding the Council’s finances, which he felt could be harming to the borough. He stated that the investment approach had generated approximately £115mn of income, after £16mn interest paid had been deducted from the entire capital borrowing requirements, and not just investments. He commented that all Councillors had unanimously voted for the increases in borrowing in 2017, 2018, and 2019, and Thurrock had benefitted from an 11.5% return on investment, which had improved the lives of residents. He mentioned that pre-COVID the administration had balanced budgets and a surplus, whilst increasing reserves by 300%, which had helped pay for services for residents.

Councillor Hebb explained that Thurrock’s budget was approximately £150mn, of which £70mn came from council tax, £40mn came from business rates, £10mn from grant funding, and £30mn came from the investment approach, which meant that there would now be a funding gap of approximately £30mn due to the winding down of the investment approach. He added that the Council had invested in green power which improved the environment and ensured that officers could remain focussed on work within Thurrock, rather than maintaining investments. He stated that Thurrock had been investing for decades before the investment approach had been agreed, and peer reviews had been undertaken which had supported the investment approach. He summarised and stated that due to the loss of income from the investment approach, decisions had to be made to ensure the funding gap was closed. He stated that the gap had been £34mn, but the finance team and directorates across the Council had worked hard to close this gap to £4mn.

Councillor Johnson stated that Children’s Social Care had statutory duties to fulfil to protect vulnerable children and young people within the borough. He stated that 50% of the £70mn collected from council tax was used to pay for Children’s Social Care, and the Council’s first duty was to protect vulnerable children. He explained that in recent months Thurrock had seen an increase in high needs and high complexity cases, which had increased the spend by Children’s Social Care. He added that the average cost of weekly placements had also increased, as well as the costs of unregulated placements. He stated that the team were currently trying to convert the three unregulated placements in Children’s Social Care to alternative residential provision, as the cost of an unregulated placement was £20,000 per week. He stated that the team had also seen an increase in referrals to Children’s Social Care throughout COVID-19, many of which had been affected by delays within the court system. He stated that the Children’s Social Care team were working closely with all partners, including finance, to maintain good practice, whilst also working to increase preventative measures and reduce the number of children entering the care system. He stated that the team were currently working on an idea to have Members as Children’s Champions, who would work with each sector and improve preventative care measures.

The Leader thanked both Councillors for their report, and highlighted that the £16mn of interest paid also included interest on the capital programme and LOBO debts. He thanked Councillor Johnson and the Children’s Social Care team for their work in trying to convert unregulated placements to in-borough placements as this would reduce costs and improve outcomes for vulnerable young people in Thurrock.

RESOLVED: That Cabinet:

1. Commented on the forecast outturn financial position for 2021/22.

2. Agreed that Thurrock’s 2022/23 Schools funding formula be implemented as stated in section 6. This being consistent with Cabinet’s decision made for 2020/21 and 2021/22 schools funding formula.

3. Agreed to accept Highways England designated funding of £0.750m and add the first phase of the SEE Park project to the capital programme.

Reason for decision: as outlined in the report
This decision is subject to call-in