Thetford Town Council branded as ‘bordering on insolvency' after financial audit

A council that agreed to spend £30,000 on tackling climate change has now been warned it is ‘bordering on insolvency’.

An internal audit found Thetford Town Council – which counts Terry Jermy, the local Labour MP, among its members – has ‘excessively low balances’ and urged it to reassess its investments.

The council has been under fierce criticism from locals for several months over the handling of its finances after it unanimously voted to declare a ‘climate emergency’ and commit £30,000 of its funds to combat the issue.

The audit report will be seized upon by critics angered at the climate change spending, agreed unanimously by members in February 2024.

They claim it is a poor use of resources for a town council.

The authority, which represents the 25,000 people living in Thetford, is largely funded through a precept, which is collected as part of the council tax paid locally, as well as fees and charges on services.

It collected £1.1m through the precept in the previous financial year.

Such councils usually focus time and funds on amenities they are responsible for such as allotments, playing fields, cemeteries and public toilets.

The decision to declare a climate emergency included a commitment for all council meetings and committees to consider carbon and ecological impacts of decisions made wherever relevant, and for funds to be set aside to support sustainability projects in the area.

Of the £30,000 set aside, £10,500 of this has been allocated to install rainwater harvesting systems at the Shambles and the chapel in London Road Cemetery, both owned by the council.

The fund has been criticised in speeches by a campaign group known as Thetford Council Watch, which attends council meetings to raise topics such as climate change, sex education in schools and the use of vaccines.

The presence of the group at meetings has resulted in the police being called on several occasions as well as the council hiring security staff to help restore order as discussions become heated.

At a recent meeting, one member of the group banned from the chamber watched proceedings from outside by standing on a windowsill.

Councillors have been repeatedly pressed by the campaigners to explain the scientific evidence for their decision to set the money aside for climate change and urged to spend the funds on other local services.

The new audit report states: “Balances reported by the council are excessively low and bordering upon insolvency.

“The council must ensure it maintains adequate capital and has not unduly committed excessive capital into long-term investments.”

Following the audit – which all councils must routinely carry out – the authority said it still had sufficient funds but that much of them were in stocks and shares and that it would now ‘revisit’ those investments.

Councils routinely keep some of their funds in long-term investments to generate additional income and provide financial security.

However, the auditor advised that no more than £100,000 should be held in stocks and shares.

At the time of the review, the council had invested more than £600,000.

A Thetford Town Council spokesman said: “Although we received this from the auditor the council does have reserves but they are in stocks and shares.

“Therefore, the council must revisit the decision to keep its reserves in long-term investments.”

The auditor said the council was exposed to ‘excessive risk’ and advised that the long-term investments in held in shares be liquidated ‘immediately’.