Council still in debt if assets are sold - report

Woking Borough Council would still be in debt if it sold all its assets, a report finds

Even if bankrupt Woking Borough Council sold everything it owned it would still be more than £1.5bn in debt, a report has found.

The figure was published on 6 March as part of ongoing reports government commissioners must produce as the council goes through the process of rebalancing its books, according to the Local Democracy Reporting Service.

It said the council, which declared itself bankrupt in 2023, was taking steps to sell off its assets but the level of debt meant it needed significant government support.

Responding on behalf of the Ministry of Housing, Communities and Local Government, Baroness Taylor of Stevenage said the department was reassured the council was committed to overhauling its operations.

The report said the council had a core spending power of £16.9m a year but servicing its £2.1bn debt was costing £1.3m a week in interest alone.

The report read: "Even if everything else could be disposed of, the level of overhanging debt would still be significant, over £1.5bn, as the level of debt far exceeds the value of assets."

It added that some assets, such as the council's social housing, which was valued at £400m, had to be retained.

However, if the council did nothing, the annual interest costs and loan servicing would average £70m and £73m a year, respectively, "which would add significantly to the level of debt", read the report.

The council was granted exceptional financial support for the next two years, which will allow it to cover the interest and other revenue costs.

Commissioners warned the council would be unable to repay the support and said "work is under way to determine the best exit strategy".

The borough council approved its budget for 2025/26, which includes a 2.99% council tax increase for residents.