The report presented to Members focused on three areas: financial strategy, divestment of the previous investments and other financial management initiatives.

The following points were raised:

·       Member referred to the 40% of the revenue budget that would be spent servicing debt which was an unsustainable position; another five years of going to the government for exceptional support to set a budget; £75 million on service cuts and selling £150 million of land and property and selling of additional investments.

·       Member concluded as a result the future of Thurrock would look very different.

·       Member referred to the remaining investments, selling of £1 billion of 14 separate investments which 75% of that was two investments.

·       Member stated the council had to ensure that costs did not spiral further out of control.

·       Member referred to recommendation 2.1 (v) (a) and questioned the financial thresholds in the Council’s Contract Procedure Rules.

·       Member raised her concern on the disposal of capital assets.

·       Member questioned and raised her concern that the Investment Advisory Panel had not yet met.

·       Member referred to readjustments of budgets which would involve capital projects being refocused to include essential spend and questioned why this was in the report.

·       Member questioned how confident the portfolio holder was in regard to the planning savings of £18.2 million as the report could potentially have been misleading.

·       Member welcomed that Members were receiving a true extent of the financial problems of the council and needed to get to a place in order to take action to make improvements.

·       Member raised concern on who the assets and parcels of land would be sold to.

·       Member stated his concern how the £18.2mlillion to be saved from next year’s budget would have on the services used by the people of Thurrock.

·       Member also raised concern that there was no cross-party democratic oversight of the divestment process, continuation of delegated powers and members being informed after the fact.

·       Member requested pink papers presented at cabinet should also be sent to shadow portfolio holders.

·       Member requested an update on the audit accounts which remained outstanding.

·       Member raised her concern on the blame culture within the chamber.

·       Member referred to the selling of £150 million investments and had been surprised this would take five years.

·       Member praised the portfolio holder for the progress being made with the support from officers, Essex County Council as well as the progress made by the previous leader and chief executive of the council.

·       Member stated the focus had been on local authorities who had declared a section 114 action and that questions were being asked on what could be done to rectify those individual circumstances without questioning the wider suite of circumstances that caused the events. Referred to the structure of funding across local government, direct funding streams and local government reform and how to use the ingrained links that Thurrock had with government.

·       Member questioned why members were surprised to see HRA within the report as this had been considered as part of the council’s budget.

At 8.02pm, Councillor Manwa arrived into the chamber.

·       Member questioned again the financial thresholds in the Council’s Contract Procedure Rules. The Mayor agreed that the meeting could be adjourned so that figure could be confirmed.

The meeting adjourned at 8.14pm.

The meeting reconvened at 8.26pm.

·       The portfolio holder confirmed the current limit was £500,000 and had asked officers to waive that temporarily. This would be reviewed and reported back to Council in late December, early January 2024.

·       The portfolio holder stated the next Investment Advisory Panel meeting was scheduled for the 31 October 2023 with the November meeting being cancelled to accommodate the Extraordinary Corporate Overview and Scrutiny Committee. A future date would be rescheduled as soon as possible.

Members noted the recommendations.

RESOLVED

That Council

i)        noted the progress on the investment recovery and divestment strategy.

ii)       noted the progress being made on the other financial actions.

iii)      noted the urgent ED2 decisions made to date.

iv)      noted the continued use of necessary advisors as required until

completion of work associated with divestment of and recovery of value of investments including the conduct of litigation, subject to the review of the programme currently being undertaken by the Council’s officers to be reported to Cabinet in November 2023 and the Leader, Finance PFH, Chief Executive and Commissioners being consulted before advisors are instructed on new work streams.

v)       noted that each council Director involved in delivering the strategy is in consultation with the Leader, Finance Portfolio Holder the Section 151 officer, the Monitoring Officer (where the Director does not fulfil one of those roles) and Commissioners is authorised within their professional area to (a) subject to recommendation 2.1 iv), to procure and appoint the advisors using the most expeditious and efficient procurement process which is lawfully available under the Public Contract Regulations 2015 and that the financial thresholds in the Council`s Contract Procedure Rules are waived for this purpose; and (b) to take all action necessary (within appropriate budgets) to ensure the implementation of the Council`s recovery strategy if timescales do not allow for a report to Cabinet as long as a full update is provided at the next available Cabinet meeting.

vi)      noted the Director of Law and Governance is authorised to the

commence legal proceedings for potential claims where there is a

supportive advice from a King`s Counsel together with any associated action after consultation with the Leader Chief Executive, Section 151 Officer and Commissioner subject to reports on progress being brought to Cabinet.

vii)     noted the Section 151 Officer in consultation with the Leader and

Portfolio Holder, the Monitoring Officer and Commissioners is given delegated authority to take all action necessary to implement the divestment strategy where a divestment meets the criteria set out in the Direction subject to reports on progress being made to members.

viii)    noted that the main objective is to reduce the Council’s exposure to financial risk by delivering a divestment strategy that optimises (sums and timing) receipts to repay the borrowings as long as doing so secures best value using its criteria set out in this report.

ix)      noted an indicative hurdle rate of 12% (i.e., 7% PWLB rate and 5%

MRP) is set for investment yield / return, with anything yielding less being put forward for sale, subject to the detail of the individual investment, the Council’s contractual obligations and the ability to deliver value for money.

x)       noted and agreed the review of the programme as set out in paragraph 4.70 and requests regular reports back to Cabinet on progress on the financial strategy.