Guildford Borough Council imposes controls amid bankruptcy fears

Guildford council is imposing strict financial controls before it considers a Section 114 notice - which effectively declares bankruptcy.

The authority said challenges were due to a "legacy of ambitious decisions" over infrastructure and regeneration.

The Lib Dem administration blamed a string of Tory policies - but the Conservatives who previously ran the council said the claim was "laughable".

The borough council is facing a £300m debt, which is expected to rise.

However, a statement said: "We are not issuing a Section 114 notice at this time. We will continue to work towards further financial sustainability. A Section 114 notice will be reconsidered in time for the October council meeting."

Council leader Julia McShane said she was aware residents may worry, but said: "We are committed to providing essential services."

The Lib Dems said previous Tory administrations had committed the council to high levels of borrowing in order "to fund a bloated portfolio", the Liz Truss 2022 budget had massively increased borrowing costs, the privatised national audit system had failed, and councils had been using reserves after a decade of funding cuts.

Their statement also said a finance review had unearthed accounting issues.

Conservative group leader Philip Brooker, said previous Tory administrations had had "tight" budget control and passed on a sound legacy, adding: "It is laughable to suggest that this crisis was caused by the Conservatives."

He said the Lib Dems had done nothing to review or manage major projects, adding that millions of pounds had been lost or wasted, largely due to incompetence.

Former council leader, Joss Bigmore, from the Residents for Guildford and Villages group, told the Local Democracy Reporting Service that Guildford was "nowhere near" the situation of Woking council which issued a Section 114 notice in June.

He said a review of finances had shown some errors which had made the situation "even more urgent".

Mr Bigmore said the council could still balance its budget, adding: "Our balance sheet is very solvent. It's just a matter of managing cash flow, to manage the interest payments."

A special budget will go before the full council on 25 July.

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