Government to help cash-strapped council repay debt

Woking Borough Council declared itself effectively bankrupt in 2023

The government will help a council repay its multi-billion pound debt ahead of local government reorganisation, it has been announced.

The Ministry of Housing, Communities and Local Government said it had committed to providing "initial debt repayment support" to Woking Borough Council (WBC), but had not yet agreed on an amount.

A ministry spokesperson said: "It is not typical for a council's debt to be addressed or written off centrally. However, the government accepts that there are exceptional circumstances in Woking due to significant unsupported debt which cannot be managed locally in its entirety."

Dale Roberts, WBC's deputy leader, previously welcomed the government's commitment to future financial support.

He said: "While there is much still to be agreed, this announcement provides reassurance as we continue to work closely with government and other Surrey councils to secure a sustainable financial future for Woking and the best possible outcomes for residents."

The support is expected to be received in April 2026 and the government said it would "ensure that any support takes value for money for national and local taxpayers into account".

In September, the government said it hoped to confirm "in-principle" the initial tranche of debt repayment the council would receive.

Local government reorganisation

The council declared itself effectively bankrupt in 2023 with £2bn of debt.

But in May, the authority said the government had agreed to "aid the reduction" of its financial hole.

The BBC has asked the government how much money they intend to give the council.

Ministers, who are unhappy with the current two-tier system, want to scrap Surrey Council Council (SCC) and the county's 11 borough and district councils, and set up new unitary authorities.

SCC had backed plans for the county to be split into two unitary authorities, which would see Woking grouped with Spelthorne, Surrey Heath, Runnymede, Guildford and Waverley.

However, WBC had supported plans for three unitary authorities, meaning it would be combined with Surrey Heath, Guildford and Waverley.

Speaking on BBC Radio Surrey, SCC's Conservative leader Tim Oliver said WBC's debt was expected to be "ringfenced out and therefore won't have an impact on the new unitary [authority]".

A government consultation on the proposed authorities finished on Tuesday and a decision on the final plans was expected by the end of 2025.

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