Woking Borough Council’s Section 151 Officer and Interim Director of Finance has today (Wednesday 7 June 2023) issued a Section 114 Notice under the Local Government Act 1988 in response to the unprecedented financial challenges facing the Council.
The Notice is required because the expenditure of the Council is set to exceed the financial resources available, and therefore it can no longer balance its budget for the current financial year nor subsequent years.
Against the core funding of £16 million available in the 2023/24 financial year, the Council faces a deficit of £1.2 billion.
The Council faces this extremely serious financial shortfall owing to its historic investment strategy that has resulted in unaffordable borrowing, inadequate steps to repay that borrowing and high values of irrecoverable loans.
Under legislative requirements, a Section 114 Notice stops all but essential spending, with the aim of enabling the Council to continue provision of services to its most vulnerable residents.
Julie Fisher, Woking Borough Council’s Chief Executive, 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.
“Through the commissioning of an independent financial review of the Council’s borrowing and loans to its companies, we have a comprehensive understanding of our severe financial position which informed the Section 151 Officer’s decision to issue a Section 114 Notice.
“The Council is required to meet within 21 days to consider the Notice. I am preparing a response to this Notice for an Extraordinary Meeting of Full Council that is being arranged for Tuesday 20 June to meet this requirement.
“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. My first report on these actions will be to the Thursday 13 July meeting of the Council’s Executive.”
Cllr Ann-Marie Barker, Leader of Woking Borough Council, said: “My administration has been very clear about the huge financial challenges facing the council due to the legacy of inherited debt.
“The Notice makes clear the true scale of these challenges which are so significant that the Council cannot simply deal with them on its own. We must work in partnership with the whole of government and its agencies to support us in delivering a robust Improvement and Recovery Plan.
“I understand the concerns and questions this will raise, and I am committed to maintaining transparency with residents and partners as we progress through this unsettling time.
“Difficult decisions will lie ahead as we seek to balance the Council’s budget and address the unaffordable debt.”