Ministers have intervened to prop up a Home Counties council amid fears it could collapse under debts of almost £2.5billion.
Local Government minister Lee Rowley today said commissioners had been appointed to take over Woking Borough Council, saying it ‘was the most indebted council in England’ of its size.
In a statement to MPs he said the authority had racked up debts of £1.9billion that were expected to increase to £2.4billion by 2024/5.
The authority has little chance of servicing the debt, with a net budget of just £24million, he added.
The council has been run by the Liberal Democrats since May 2022. But the debts were mostly built up by the previous Tory administration, which invested heavily in a shopping centre, residential skyscrapers and a 23-storey Hilton hotel.
Although councils cannot technically go bankrupt, the authority earlier this year warned it may have to issue a Section 114 order, which means it is insolvent.
The £2.4billion debt amounts to almost £24,000 for each of the borough’s 103,000 population.
Local government minister Lee Rowley today said commissioners had been appointed to take over Woking Borough Council, saying it ‘was the most indebted council in England’ of its size.
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In a statement to MPs he said the authority had racked up debts of £1.9billion that were expected to increase to £2.4billion by 2024/5. Cllr Ann-Marie Barker, the Lib-Dem leader of Woking Borough Council, said: ‘My administration is very clear about the huge challenges facing the council due to the legacy of both the extraordinarily high and disproportionate levels of debt that we have inherited from the previous administration.
In his written statement Mr Rowley said the authority was ‘failing to comply with its best value duty to make arrangements to secure continuous improvement in the way in which its functions are exercised’
‘The financial challenge is acute, and the review has concluded that the Council cannot become financially self-sustaining without considerable Government support,’ he said.
Cllr Ann-Marie Barker, the Lib-Dem leader of Woking Borough Council, said: ‘My administration is very clear about the huge challenges facing the council due to the legacy of both the extraordinarily high and disproportionate levels of debt that we have inherited from the previous administration.
‘We are also very clear and focused on the significant risks that the council is now facing up to as a result of that debt.
‘We also recognise that these challenges are so significant that the council and its officers cannot deal with these on its own. We therefore fully acknowledge and accept the findings of the report and welcome the support set out by the Minister in his letter.’
