'Significant mistakes' at bankrupt Woking - report

A report looking at bankrupt Woking Borough Council's "long and atypical history of borrowing" said accounting practice and systems were poor and that "significant mistakes were made" at the authority.

Auditors Grant Thornton have published a public interest report looking at the council's financial situation, which led to debts of £2bn.

Ray Morgan, who worked at the council for more than 30 years, was named in the report as the "principal architect of the council’s investment decisions".

He said he was aware of the report's publication and that it would be inappropriate for him to comment ahead of the council considering it on 20 November.

The report said: "Both documentary evidence and the information provided by stakeholders make it clear that the former CEO, Ray Morgan, was the principal architect of the council’s investment decisions."

Douglas Spinks and Peter Bryant, two other former senior officers who retired in the same year as Mr Morgan, were named alongside him in the report as being "a close-knit group who were not exposed to challenge and new ideas".

The report looks at the governance of the council’s investment decisions from 2008 onwards and the financial impact of these decisions on Woking's financial sustainability.

The council effectively declared itself bankrupt in June 2023 and now has government commissioners in place to turn its finances around.

Woking's debt built during an investment strategy which saw it borrow hundreds of millions of pounds for regeneration projects, including the town's Victoria Square development.

Grant Thornton's report said: "There was a lack of commercial knowledge and specialist legal knowledge within the council.

"Accounting practice and systems were poor and significant mistakes were made which led to the lack of an accurate picture of the council’s true financial position."

The report also said the stakeholders involved in the council during the years Mr Morgan was in post "provided a consistent narrative that he was the driving force behind the investment decisions and significantly influenced the members’ approach to risk".

"His drive, vision and commitment to Woking, and to the council, were regularly commented on in a positive light," the report said.

It also said that the former CEO "did not welcome challenge of his decisions by other stakeholders".

The council's leader, Ann-Marie Barker, said the authority had been "focused on tackling the severe financial challenges" since her Liberal Democrat group took control of the council in 2022.

She said she welcomed the publication of the report and that it represented "a pivotal moment in understanding the decisions and actions of the past" which had contributed to the council's current situation.

Councillors will discuss the report at specially-called meeting on 20 November.

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