Thurrock Council on brink of financial ruin after disastrous investments leave £500m black hole

An embarrassed Council leader Mark Coxshall told ITV News the situation in Thurrock had been a 'catastrophic disaster'

An Essex council is facing a financial black hole of almost half a billion pounds after a series of disastrous investments.

Conservative-controlled Thurrock Council admitted it was in a 'grave financial situation' and would need a government bailout to avoid going bust.

Labour accused council chiefs of wasting public money on 'get rich quick schemes' including failed solar farm projects.

But in an interview with ITV News, council leader Mark Coxshall declined to explain the losses before the outcome of an investigation.

'Shocking numbers'

In a statement he added: "These are shocking numbers but the first stage to creating a good plan for recovery is to understand the full extent of the problem.

"I know that Thurrock residents will be concerned and rightly so about what this means for local services. Please rest assured that this report is the first stage of planning for our recovery.

"Everybody now has a fuller understanding of the gravity of the issues we face. We know the council cannot find a way to finance its expenditure in-year and will not achieve a balanced budget next year without external support.

"We will have to request exceptional financial support from the government over a number of years to stabilise our financial position and give us time to have balanced budgets.

"Alongside this support we will have to use other levers including asset disposal, efficiency savings, council tax increases and funding flexibilities from central government to recover our financial position."

Below: Watch Simon Harris's full report into the turmoil at Thurrock Council

Councillor Coxshall took control of the council after the resignation of previous leader Rob Gledhill when the scale of the financial scandal emerged in September.

At the same time, government commissioners were appointed to take control of the authority’s finances.

Councillor John Kent, Labour group leader at Thurrock Council said: "What we do know is that they borrowed huge sums of money, over a billion pounds, to invest in what have amounted to 'get rich quick schemes' that have failed to deliver.

"We know the investments have now lost about £275m which will have to be found in future years.

"I think what's happened is inexcusable and avoidable, there has been total negligence on behalf of the Conservative cabinet that have been running Thurrock Council for the last six years.

"They should have been asking difficult questions and holding officers to account, they should not have allowed this to happen."

Thurrock council serves a population of 176,000 and includes the towns of Grays, Purfleet, Tilbury, Corringham, Orsett and Stanford-le-hope.

A Thurrock spokesperson confirmed the council chief executive Lyn Carpenter and chief finance officer Sean Clarke were on extended leave.

Council officers have been set a deadline of the end of the year to draw up a rescue plan amid fears of widespread cuts.

Gavin Jones, Lead Commissioner, said: "The financial position the Commissioners have outlined is a grave one; it is also not yet complete as further work is underway.

"We have made good progress working alongside Thurrock Council's leadership to understand the position and to begin to take positive action to address the situation.

"That support will continue as we ensure that essential services can continue to be delivered. We have to be realistic, however, about changes to the Council's operations which the financial position mean are inevitable."

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