Woking Borough Council has warned that it is in the “territory” of issuing a section 114 notice as the authority’s debt is set to reach £2.4bn.
A report to be presented at an extraordinary council meeting on 23 February outlined that the council has managed to achieve a balanced budget for 2023/24 through a range of measures, which includes implementing cost savings, using £8.3m in financial reserves and increasing council tax by 3%.
However, the report highlighted that the Woking has high levels of borrowing and debt, which has made the authority’s medium- to long-term financial outlook uncertain.
The report stated: “The council is in the territory of s114 but, as of the date of this report, a s114 notice is not required. As the work on the 2024/25 budget progresses this may lead to the issuing of a S114 notice.”
In October 2022, the minister for local government expressed concerns over Woking’s debt. At that time, the council’s debt was estimated to increase to almost £2.4bn by 2024/25.
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Ann-Marie Barker, Woking’s leader, said: “Since my administration gained control of Woking Borough Council, getting its finances under control and presenting a balanced budget for 2023/24 has been our priority.
“Despite the setting of a balanced budget, the council’s medium and long-term financial position remain critical.”
Dale Roberts, portfolio holder for economic development and finance, added: “Let me be clear. We face a mountain of unsustainable debt, together with an uncertain and challenging future. It will require painful decisions about which services we can deliver.
“Significant obstacles lay ahead including an over-dependence on commercial rent and parking income, unaffordable debt and budgetary restraints usually applied under a section 114 notice.”
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