Woking BC has warned it is ‘in the territory’ of issuing a section 114 as it struggles with more than £2bn of debt.
The local authority, which is currently subject to a Government review of its finances, has published plans to balance its budget in 2023-24 but has said it is not clear how it will deliver a balanced budget for 2024-25.
Woking has about £2.4bn of debt due to £1.8bn in loans, including £700m for its Victoria Square development amid inflationary pressures.
This has led to the council warning it might have to issue a s114, which would mean a halt to all non-statutory spending.
A report to an extraordinary council meeting tomorrow read: ‘The council is in the territory of s114 but, as of the date of this report, a s114 notice is not required.
'This report, however, may lead to the issuing of a s114 notice in 2023-24 as work on the 2024-25 budget progresses.’
Council leader Ann-Marie Barker said: ‘Since my administration gained control of Woking BC, getting its finances under control and presenting a balanced budget for 2023-24 has been our priority.
‘Achieving this has meant taking a responsible, affordable, and, most importantly, sustainable approach to the council’s finances.
‘Despite the setting of a balanced budget, the council’s medium and long-term financial position remains critical.
‘It remains unclear how the council will establish future balanced budgets without making difficult decisions around the continued delivery of some services.
'Further cost savings are inevitable to reduce the unsustainable reliance on the council’s financial reserves.’
Portfolio holder for finance, Dale Roberts, added: ‘We face a mountain of unsustainable debt, together with an uncertain and challenging future.
'It will require painful decisions about which services we can deliver.’
