Mole Valley council facing bankruptcy

The council says it needs to make difficult decisions

Mole Valley District Council has said it is facing bankruptcy and must make “very difficult decisions” over the future of its services.

The bleak warning came during a scrutiny committee meeting on Tuesday.

Unless the council makes significant savings then “in all scenarios” reserves would fall significantly below minimum levels required in 2026/27 and be exhausted between 2027 and 2029, council officers said.

Councils must balance their budgets and failure to do so can lead to Section 114 bankruptcy notices being issued. When this happens all new spending must stop.

Mole Valley District Council must find £1.8m savings this year but has only managed to achieve £493,000 so far and is expected to fall short by about £1.2million.

As it stands, the council must find a further £760,000 of savings or income for the 2026/27 financial year.

It is also recommended that the council starts to develop plans to deliver at least £1.3million of further savings for 2027/28 and 2028/29.

Anything other than drastic cuts would put Mole Valley "at such significant financial risk" that the council’s chief financial officer would likely be legally bound to consider using statutory powers, the Local Democracy Reporting Service said.

Commissioners would be brought in, with the council losing day-to-day control.

The council’s executive head of service for finance and strategy, Claire Morris, said: "All the low hanging fruit, the easy wins, have been taken.

"We are now into making some very difficult decisions potentially."

Short term cash flows have been hit by a double whammy of the council failing to sell assets, and being unable to find anyone willing to rent office space in its civic centre.