Woking Liberal Democrats Statement on Section 114

Statement following today's announcement by Woking Borough Council issuing an 'effective bankruptcy' Section-114 notice, signalling that a balanced budget is now unachievable:

The final decision by council officers was made following the completion of work commissioned by the new Liberal Democrat council administration and conducted by the experts including the Chartered Institute of Public Finance and Accountancy (CIPFA). This confirms an unprecedented deficit of £1.2 billion.

The report also confirms that the impact of borrowing had been understated in council accounts dating back before 2018-2019.

The new Liberal Democrat administration will now be focusing on next steps in a long journey towards recovery and sustainable services for Woking residents, following this period of essential and inevitable truth-finding.

Cllr Dale Roberts, Portfolio Holder for Finance and Economic Development at Woking Borough Council, comments:

“The section-114 exposes a decade of financial mismanagement on a staggering scale that will have implications far beyond Woking Borough boundaries. We now know that even back when the UK was announcing its first lockdown in 2020, the council budget was already over £100 million in the red and the deficit was set to grow by tens of millions each year. However, our focus must now be on residents and that hard work of securing a sustainable financial future for Woking.”

Cllr Ann-Marie Barker, Leader of Woking Borough Council since May 2022, comments: “Though the announcement is stark and the scale will be shocking for residents, it was critically important that we understood the full extent of the problems.”

“We have also been open about being in section-114 territory and have been preparing for this eventuality for some time. Unlike recent examples of local authorities at this stage Woking has been proactively preparing for the worst outcome. Recovery plans including efficiencies, optimising assets, stronger governance and restructuring borrowing started as soon as we took over the administration. It is also encouraging that the other major consequence of a section-114, the nature of government intervention, has already been determined. This has reduced the level of uncertainty particularly as our new commissioners delivered findings through a government-appointed review that we welcomed and agreed”.

The section-114 report details over £350 million that was not set aside according to government regulations known as minimum revenue provision (MRP) £160 million that relates to loans being used as revenue in council owned companies, and £45 million annually of understated repairs and maintenance budgets.

The council has already implemented financial controls including halting new spending and councillors will have the opportunity to debate the implications and agree an emergency plan at a Full Council Meeting.