Thurrock Council is set to request the government’s permission to raise council tax at a rate that exceeds the national referendum limit following its issuance of a section 114 notice.
A council report outlined that the authority faces a provisional deficit for its 2023/24 budget of £452m against a budget of £153m. Hence, it detailed that a series of actions will be required to support its financial recovery including council tax increases, asset disposals, revenue savings and exceptional financial support from government.
This comes as Jonathan Wilson, Thurrock Council’s acting director of finance and s151 officer, issued a section 114 notice on 19 December due to the “extremely serious nature” of the authority’s financial situation.
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The report highlighted that Thurrock’s council tax is benchmarked as the 53rd lowest out of 56 unitary authorities and is the lowest within its CIPFA group of comparable local authorities.
It stated that past administrations have chosen not to increase Thurrock’s council tax at the same rate as comparable local authorities, which has led to a lower council tax revenue base and a consequent lower overall increase in council tax revenue.
“Historically, this deficit [in council tax] has been ameliorated by income generated from investments, but this is clearly no-longer a feasible strategy.
“To support financial recovery, members will need to support increases in council tax including a request to the Department for Levelling Up, Housing and Communities for dispensation to raise council tax at a rate that exceeds the national referendum limit,” the report said.
At an Extraordinary Council meeting on 9 January that discussed the report, John Kent, Thurrock Council’s labour/opposition leader, opposed the recommendation to increase council tax without a local referendum.
He said: “We are being asked this evening to agree to raise council tax by more than the 5% referendum limit without holding that local referendum. I want to be very clear, the Labour group will not be supporting that recommendation.”
Following Kent’s opposition, members of the council agreed to the recommendation on the council tax increase with an amendment.
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