What next for 'bankrupt' Woking Council as Extraordinary General Meeting looms

Above: Iain Murray , from the Chartered Institute of Public Finance & Accountancy said the problems at Woking were down to a failed investment strategy

Woking Council will hold an emergency budget meeting tonight as it grapples with a huge financial black hole.

The council is close to bankruptcy after borrowing money to build housing developments it can't pay back.

Residents are facing potential council tax rises and the council may need to enforce big budget cuts.

Councillors issued a section 114 notice which means all but essential council spending is immediately halted to ensure vulnerable residents are protected.

The accumulated £1.8 billion shortfall in Woking’s finances also means it is unable to meet its budgetary requirements in the coming years.

Speaking earlier this month, Woking’s chief executive Julie Fisher said: “The issuing of a section 114 notice is a very serious matter that rightly reflects the scale and breadth of the acute financial situation facing the council.”

She added the appointment by Communities Secretary Michael Gove of a commissioning team will enable the council to draw on “critical insight” and deliver its recovery plan.

Council leader Ann-Marie Barker said her administration had been “very clear about the huge financial challenges”, which she said were a legacy of inherited debt.

The Liberal Democrats have run the council since 2022. Prior to this, the Conservatives were in control and implemented the investment strategy.

Woking is the latest council to declare effective bankruptcy as a result of investment decisions.

Croydon council in London issued its third section 114 notice in November 2021, while Thurrock in Essex took the step in December last year after it got into difficulties over borrowing large sums to invest in solar energy.

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