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26 August 2023

The town that was gambled away

Thurrock Council has been left effectively bankrupt after hundreds of millions of pounds were put into risky investments.

By Anoosh Chakelian

The Thameside Complex is a brutalist hunk of Seventies concrete, its oblong slabs pencil-smudged by five decades of pollution and rain. Unlovely in appearance but beloved by locals, some of whom call it the “mini Barbican”, it houses a theatre, library, museum and café in Grays town centre in the borough of Thurrock, Essex.

From the Christmas panto to DJ courses, dementia cinema to drag nights, Thameside is the cultural heart of this port town on the Thames estuary – forever overshadowed by the capital upstream. Here you’ll find six-year-olds reciting A Midsummer Night’s Dream at drama club, and world-class ballet performed by the Royal Opera House, which has an outpost in neighbouring Purfleet.

Or rather, you could until recently.

In 2021 Thurrock Council deemed Thameside “surplus to requirements”. When I visited, chairs sat empty among pots of busy lizzies on its sun-flecked terrace, once packed with baby groups and pensioner lunch clubs – the subsidised café here closed three years ago. Inside, a lift to the dress circle remains out of use, having malfunctioned last year. A broken cinema screen has yet to be fixed. The boiler needs servicing.

Last year the museum fell into darkness – its light bulbs had stopped being replaced. It’s still crammed with curiosities: Tudor roof slates “discovered by badgers”; General Gordon’s face carved into a clay tobacco pipe; overcoats worn by arrivals on the Empire Windrush, which docked at nearby Tilbury in 1948. But the collection is dwindling. Visitors have heard about the council cuts, and are dropping in to reclaim their loaned exhibits – family paintings and grandfathers’ medals.

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Holiday-dazed kids read quietly on a rug decorated with bees and ladybirds in the corner of the two-storey library: only one of two in the whole borough that opens full-time. Some residents without home internet access used its computers to sign the now 6,300-strong petition against Thameside’s closure.

“This is a place of accessible, realistically priced entertainment for everybody to enjoy,” said Sam Byrne of the Save Your Thameside campaign, which for two years has organised petitions, protests and alternative business plans. In her late fifties, the former events organiser “never thought at my age I’d become an activist, and I’m not a political person”. But she’s even planning a lock-in when Thameside shuts. (“There’s always a sleeping bag in the boot of my car!”)

We sat low in children’s plastic chairs on a vacant floor, clutching cups of PG Tips. Looking rather glamorous with large tortoiseshell sunglasses perched on her blonde bob, wearing a tastefully patterned blouse, Byrne declared in true thespian style that Thameside is “holy ground”.

“People here are honest, hard-working, and by a large percentage working class: they’re very proud of what they’ve got and want to hang on to it,” she said. “The council has let them down. They deserve better.”

Like many locally, she was furious at the loss of a place central to her and so many other families’ memories. Raised in the suburbs of west London, she and her husband leapfrogged the capital and headed east to Grays for an affordable mortgage in 1990. She took her two children to reading trails, young producer workshops and pantos at Thameside. Her 19-year-old daughter is now in musical theatre with an agent – first inspired by a ballet performance she saw here when in primary school.

“This is just a kid from Thurrock, somebody who’s been given an opportunity and it’s sparked something to grow,” she said. “During the war, people round here were treated as cannon fodder, then they were factory fodder, and now that’s what they think of our kids in future: ‘What do they need to know about arts and culture?’ ”

[See also: What does it mean when a council declares bankruptcy?]

Thurrock Council told the New Statesman that “no decision on the future of the Thameside Complex has been made”, but its most recent meeting recommended that “consultation be undertaken on the proposed relocation of the library and museum and on alternative options for the delivery of cultural activity” in the borough.

It is not only the cultural life of Thurrock that is collapsing. Even as Byrne and her neighbours deal with a 10 per cent hike in council tax, imposed earlier this year, the bins on their street are spilling over. Thurrock council effectively became bankrupt last December (local authorities don’t declare insolvency like a business, but use something called a “Section 114” notice to restrict all new spending beyond the barest essentials).

Byrne and her fellow residents are being squeezed for every penny. In October, the cost of marriages, burials and ashes interments in the borough will rise – the latter by 9 per cent. Carers and community nurses will have to pay £31 extra a year for parking, while residents needing a third visitor permit will have to pay £75, up from £15. “We’ll be paying a lot more for a lot less,” said Byrne.

Thurrock Council has debts of more than £1.3bn, after taking out hundreds of millions of pounds in short-term loans. Council officers invested in schemes they thought would pay higher returns in the long term – including what inspectors described as “very high value long term loans to unrated companies”, which appear to have been issued without due diligence or any detailed explanation of why they would improve council finances. They included tens of millions invested in solar farms in other parts of the country, as far away as Swindon in Wiltshire.

The people of Thurrock are looking at a hard 20 years. The council has to scrap all but its most basic duties, and while central government gave the local authority special permission to raise council tax by 10 per cent, which it did in April, it will take Thurrock more than two decades to repay a £635m government bailout. In February 2024, the council will meet to discuss raising tax further.

“It’s incredibly sad,” said Byrne. “People are already on their knees, and it’s going to be my great-grandchildren paying this money back.”

Meanwhile, an investigation by the Bureau of Investigative Journalism has reported that the financial records of private companies to which Thurrock Council loaned large sums reveal lavish (albeit legal) spending.

When the Harvard economist JK Galbraith wrote of “an atmosphere of private opulence and public squalor” in The Affluent Society (1958), he was characterising postwar America. He could just as easily have been writing about Thurrock in 2023.

Watch: Alex von Tunzelmann and Ivan Rogers join Westminster Reimagined to answer the question: just how ‘Great’ is Britain anymore?

Thurrock is not alone. England is full of rotting boroughs: Woking Council in Surrey went bust in June, after running up £2bn of debt on a property investment spree in hotels and high-rises. Croydon in south London, Slough in Berkshire and Warrington in Cheshire have similarly gone broke after risky commercial ventures. Northamptonshire County Council was abolished in 2021, after attempts at a commercial property portfolio.

Ironically, councils use each other’s funds to gamble on such schemes. Thurrock Council mainly borrowed the cash it funnelled into bad investments from other councils. Short-term lending between councils has become common practice: they are regarded as a safe bet because they can’t default like a business – the taxpayer, at the local or national level, will always pick up the bill.

In 2010, the coalition government began drastically cutting council funding as part of its austerity drive, intended to help Britain recover from the financial crash. Since then, councils have lost 60 per cent of their spending power. However, they still have a legal obligation to provide services (like social care, which is in ever-greater demand) while balancing their books.

Caught between vanishing budgets and spending requirements, council officers made doomed attempts to go into business. Government ministers actively encouraged them towards commercial investment, and in 2015 abolished the Audit Commission, which had kept a check on their finances.

A Department for Levelling Up, Housing and Communities spokesperson said “the government has been clear that local authorities should not take excessive risk with taxpayers’ money, and we have established the Office for Local Government to improve the accountability for performance across the sector”.

In Thurrock, an Essex county council report found that these conditions underpinned a toxic working environment and cover-up culture where the council’s finances were concerned. This may well have been exacerbated by a Tory insistence on keeping council tax at nearly the lowest level in England (Thurrock Council is a Conservative/Labour marginal).

By July 2022, Thurrock’s cash flow was so squeezed that it was days away from defaulting on its debt payments to other councils and failing to pay its own employees.

“It was a perfect storm,” said Gareth Davies of the BIJ, who began investigating Thurrock Council in 2019. Since breaking this story, he has been contacted by “tonnes of people” across the country fearing similar scandals at play in their town halls. “Without question, if this kind of climate continues, there will be more Thurrocks.”

[See also: Local authorities need an emergency rescue package]

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