Woking Council Extraordinary Meeting 20th June

Thank you very much, Mr. Mayor

Already some very worrying news which we knew was coming from our officials there. 

I'd like to talk about how I chose to come and live and work in the borough of Woking 26 years ago. I've never regretted that decision. 

I'm really proud to be a resident of the borough of Woking. I'm proud to be an elected councillor, and I'm proud to lead this council.

The borough of Woking remains a great place to live and work. But as you've heard already, we face a challenge like none we have faced
before. On the 7 June, our finance Officer issued a section 114 notice. In doing so, he effectively told us that the borough of Woking, if it were a
business, would be bankrupt.

Councils cannot declare bankruptcy, but Woking has a deficit of £1.2 billion, borrowing of £1.9 billion, and a gap of £10 million in its day to day budget.

The Declaration of Section 114 and the government intervention announced two weeks earlier mark a key point in efforts to uncover and act on working
finances. Uncovering the truth of working finances and actions to limit borrowing was started by Liberal Democrats several years ago.

Prior to taking control of the council, we prevented loans to a private school. We objected to a proposed quarter of a million pound loan to a developer who
had planned for Kingfield Stadium, and to a grant of £100,000 to RHS Wisley, a national charity located outside of the borough of Woking.

We insisted on valuations before property or land purchases. We secured a financial review commissioned in 2021, which highlighted concerns brushed off by the then administration, anxious to
declare that Woking's finances were in a good state. 

Our efforts have accelerated since we took control of the Council last May. The work of the government review team and work we commissioned, and the hard work of our officers with financial experts have brought us to Victoria Square and Shearwater have become the poster boys of Woking's financial situation. 

But there is so much more. Purchase of land and property, many times without valuation. Creating a property empire, but without the resource and capacity to manage that empire.

Purchases made without recourse to democratic processes. Loans made to commercial operations.

The Section 114 declaration helpfully sets out a list of financial failings. Failing to use government loans appropriately, failing to set aside money to repay debt. Failing to set aside money to recover repairs and maintenance of the property empire, property and land with decreased valuations. 

All this has left us as much work over time to put our financial procedures right.

There's a long list of what needs attention. Weak financial controls, weak record keeping, weak management review processes, lack of understanding of accounting guidance and statutory requirements, lack of resource to manage a property empire.

And these failings haven't been helped by the fact our accounts haven't been signed off by auditors since 2018/19. The CEO's recommendations set out the first steps we need to take to recovery.

Woking Council has got used to living beyond its means. We need a reset. We need to commit tonight to work, to filling the £10 million gap in our day to day budgets.

We need to run Woking as a financially sustainable council living within its means. This will involve difficult decisions as we right size to a good council that is fit for the future.

It will affect our staff. It will affect our services, it will affect our residents wherever we can, we will be looking to deliver services in a different way with partners or the voluntary sector. But inevitably, we will need to stop providing some services or increase charges for services.

Proposals on this will come forward during July. We'll be discussing those proposals with fellow councillors, with residents, with businesses, with anyone with an interest in the borough of Woking. We'll be looking also at the best use of the Council's asset base to reduce the impact this huge borrowing and deficit has on public funds.

This will involve a strategic approach to sell assets or to get more out of assets. And as you've heard already, we do need help from government.

As we help ourselves to recover, we will be able to put a clear ask to government on the support we need to reach a full recovery. 

Woking needs to move forward. And I would appreciate the support of each and every one of you this evening. During the difficult journey ahead, take the first positive steps on the challenging road to recovery.

Give your support to the recommendations that lie before you. I'm sure we all want to be part of running a borough that we are proud of.

We all want our residents to live in a borough that they can be proud of. Our best way forward is together working as one.

Please support the recommendations before you this evening.

I just want to join others in congratulating officers for their amazing work and presentation this evening. Both Brendan and Julie, but also all the officers behind the scenes.

I just want to talk about what has led to this point, what happens next. And finally I want speak about, to be honest, what's the most important issue?

The impact on local people and having spoken to them a lot over the last few weeks and months, I believe people are really angry, disappointed and fearful for the future. I think that's probably possibly where the mental place I am and a lot of other councillors are as well.

Earlier this month, the Guardian said, I quote, previous Tory leadership embarked on risky investment spree involving hotels and skyscrapers and they're right. But doing regeneration and investing in our town centre and our deprived community in Shearwater was not a mistake.

In principle, residents weren't wrong.

We shouldn't go up to residents and say that you were wrong for wanting investment in those places. People wanted to bring Marks and Spencers back to the town centre. Don't think we should say to people they were wrong to want that. However, as the officer reports have outlined, there was a complete failure of leadership from the previous regime to carry out these projects.

The scope and scale of the work grew without being backed up by the resources. There was a failure to have adequate business plans, failure to control costs and a failure to manage risks. It was a failure of leadership. The leader of the council in her statement, I lost count of the amount of times when she was talking about the previous council, the amount of times she mentioned "failure", "weak" and "lack of" and those are the issues that has brought us here today.

All of that is why I'm pleased the council in these papers is commissioning a value for money review into the investment strategy and actions of the previous leadership. Holding an independent review I think is critical since the government intervention was announced in late May and following the news that the council is unable to balance its budget.

Recently, local people have quite rightly wanted to understand how a small borough council reached an over 1 billion pound deficit. A small borough council. This council cannot afford the legacy of debt that we've inherited.

And I want to give three facts to demonstrate that. Our interest is six times the value of our council tax. What we make from council tax, we spend £170,000 a day in interest.

And if someone went to get a mortgage for 10,000 pounds so if our mortgage, if our debt was equivalent to a mortgage, it would be getting 10,000 pounds of a salary for a million pounds worth of mortgage. That's completely out of the scale.

We need to start discussions with the government soon to seek financial support as officers have been clear that the Council has no means of funding the financial deficit on its own.

But I understand that we need to earn the trust of the government and regain the trust of our residents. As Brendan has said, we need to put our own house in order and clearly show that we can live within our means in the future.

Finally, Mr.Mayor, our residents, the Lib Dems and I, are honoured that voters have put their trust in us to try to turn around working Borough Council. It is going to be incredibly difficult to make those impossible decisions to balance the books, but Councillor Barker outlined some of the ways we intend to do it, and I hope this is something we all can agree on. We cannot, should not and must not stop. 

Core services that people rely on bins will still be collected, we will still support the homeless, and residents will still get their planning applications approved.

Above all, we need to protect vulnerable people, and actually issuing a Section 1114 does do that, and it sets us on the road to recovery. 

Thank you, Mr. Mayor.