New spending halted in Woking as Council incurs £1.2bn deficit
Woking Borough Council has imposed emergency measures after a spending spree left the local authority with a deficit of £1.2bn.
The council’s interim director of finance issued a Section 114 Notice on Wednesday in response to “unprecedented financial challenges”.
For the 2023/24 financial year, the Woking Borough Council has just £16m of core funding available.
The Council expects its debts to hit £1.2bn, and has written down the value of its investment portfolio by £600m.
“The notice is required because the expenditure of the Council is set to exceed the financial resources available, and therefore it can no longer balance its budget for the current financial year nor subsequent years”, the council said.
A series of costly investments into the local infrastructure saw the deficit increase, including the development of the Victoria Square shopping centre. This was partially funded by £750m of borrowed money, although the development was reportedly worth just £200m.
Other investments include a number of towers, with Woking now home to the tallest buildings outside of a big city in England. A Hilton hotel, public plazas, shops, and parking facilities were also constructed.
The local authority also failed to put enough cash aside to pay for debts incurred by the previous Conservative council.
Julie Fisher, Woking Borough Council’s chief executive, 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.”
Cllr Ann-Marie Barker, leader of Woking Borough Council, added: “My administration has been very clear about the huge financial challenges facing the council due to the legacy of inherited debt.
“The notice makes clear the true scale of these challenges which are so significant that the Council cannot simply deal with them on its own. We must work in partnership with the whole of government and its agencies to support us in delivering a robust improvement and recovery plan.”
The council must discuss the notice within 21 days of its issuing.