Woking Borough Council bans new spending due to £2bn debt

Woking Borough Council has imposed emergency spending restrictions on itself due to its £2bn debt.

All spending for non-essential services has been halted after the Section 114 notice was issued, the council said.

Its chief executive said the full impact on residents is not yet clear, but the restrictions reflect the "scale and breadth of the acute financial situation facing the council".

The Surrey local authority's debt is forecasted to rise to £2.6bn.

The deficit increased dramatically following an investment strategy which saw the council borrow hundreds of millions of pounds for regeneration projects.

The most high profile was the Victoria Square development in Woking town, which was based on £750m of borrowing. Reports showed the project was worth just £200m.

The Section 114 notice comes three weeks after government-appointed commissioners were sent in over the "exceptional level of financial and commercial risk" the authority exposed itself to.

The council's chief executive Julie Fisher said: "The issuing of a Section 114 notice is a very serious matter that rightly reflects the scale and breadth of the acute financial situation facing the council.

"Following the secretary of state's appointment of a commissioning team, I will be seeking their expertise and using their critical insight to help the council deliver an improvement and recovery plan at pace to ensure we take actions that are in the interests of the public purse."

The only exceptions to the spending restrictions are in cases where the council must legally protect vulnerable people and for services it must cover by law.

Woking Borough Council leader Ann-Marie Barker said the notice makes clear the "true scale" of the challenges faced by the authority.

"Difficult decisions will lie ahead as we seek to balance the council's budget and address the unaffordable debt," she said.

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