Woking 'cosplayed' at being bank, councillor says

The school was loaned £13.3m by Woking Borough Council

Woking Borough Council was "cosplaying" at being a bank when it loaned millions of pounds to a private school, a senior councillor has said.

Greenfield School borrowed £13.3m from the now bankrupt council but has since approached the authority to say it did not currently have funds to fully repay a debt of £2.4m due to mature on November 25.

The fee-paying school, which charges up to £17,000 a year for year five pupils, was loaned the money despite Woking having "no statutory duties relating to education", according to the Local Democracy Reporting Service.

The school said it needed the money to provide new class spaces, and the council at the time argued this would also free capacity within the state sector as well as serve as an investment.

Much of that debt is being paid back over a 50-year period, but a smaller carry-over loan of £2.4m is due.

The school said it was about £1.5m short, and not in a position to pay for at least another two years.

Councillor Dale Roberts, cabinet member for finance, told a meeting on Thursday: "It’s the view of this administration that the former administration had no business in entering into this arrangement. For any number of reasons."

He said firstly the borough council had no statutory duties relating to education, as highlighted in a report by auditors Grant Thornton about the council's financial history.

'The council was not a bank'

"Secondly, again according to the Grant Thornton report, the arrangement was partly to generate income. It was a commercial loan," he added.

"This council was not a bank. The act of lending did not make this council a bank.

"A bank has processes, system controls, expertise, regulatory responsibilities, compliance functions, commercial capabilities.

"This council had none of those. It was cosplaying being a bank."

The executive agreed to restructure the loan, rejecting an alternative option to take control of assets held by the school because the council is seeking to reduce its asset count.

The council told the BBC after the meeting it did not wish to add any further comment.