The minister for local government has expressed concerns over Woking Borough Council’s debt, which is forecast to increase to almost £2.4bn by 2024/25.
In a letter to the council’s leader, Paul Scully detailed his concerns about the lending arrangements for major developments the authority is undertaking. This is due to “the risks this exposes the council and taxpayers to” and “the sensitivity of these investments to commercial performance”.
He added: “I have concerns that, despite Woking having the highest level of commercial debt relative to its size of any authority, its debt is forecast to rise even further to almost £2.4bn by 2024/25.”
Scully detailed that due to “the complexity of the council’s financial position”, he would like advice from an external review into Woking’s finances, investments, and related governance.
“Although I recognise that the council has worked cooperatively with my officials, I consider such a review appropriate and necessary for a full and transparent understanding of the risks the council is exposed to from its investment strategy,” he added.
Woking Borough Council has been engaging with the Department for Levelling Up, Housing and Communities on its high levels of debt following a letter addressed to the authority by Kemi Badenoch in May 2022 when she was levelling up minister. The letter set out the government’s intent to put in place statutory powers to directly address instances of excessive risk from borrowing and investment practices.
In response to Scully’s letter, Cllr Ann-Marie Barker, leader of Woking Borough Council welcomed the independent external review proposed by the minister.
She said: “It is however clear that difficult decisions will have to be made and significant financial challenges lay ahead.
“My administration has taken decisive early action and is committed to ensuring that our financial position is resilient, affordable, responsible, and sustainable and I will ensure that that residents, businesses and community partners are kept fully informed throughout the duration of this process.”
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