Woking Council 'needs help' from government over £2bn debt

The council's own budget forecast predicts servicing of the council's £2bn debt will hit £62m per year

A deputy council leader has called for government support amid predictions his authority's near-£2bn debt will cost an unsustainable £62m a year to service.

Woking Borough Council deputy leader Will Forster described the forecast as "quite stark" as he called for government intervention.

The figures were published before Thursday's full council meeting in which a 2.99% tax rise is set to be approved.

Mr Forster said: "We need help."

According to budget papers, the council borrowed about £1.8bn for investment purposes but is only bringing in £38.5m, and that is expected to rise to £43.3m next year.

But the figure is far below the predicted £62m in annual interest payments.

The council's financial difficulties have prompted an investigation by the Department for Levelling up Housing and Communities (DLUHC).

'Quite stark'

DLUHC says no immediate decision is pending, but Mr Forster thinks the government is unlikely to put the council in special measures, given recent changes in its senior officers and political make up.

He said: "We are still waiting for a report from the government inspection team which we will check for accuracy and information, and it's too early to predict what it will find.

"However, Woking needs government support. There's not a problem with decision making and we have full faith in the officers.

"But the council can't afford to pay off its debt, not even service the debt.

"The papers are quite stark - £60 million a year just to service the debt, repaying the debt is even more."

Councils cannot go bankrupt but instead can be placed under a section 114 notice which prohibits new spending commitments.

Mr Forster expects the council to fall under a section 114 by the 2024/25 financial year.

"At this point I cannot see how it can make a sustainable budget, which is terrifying," he added.

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