Over the last week there have been multiple reports about Liberal Democrat run Woking Borough Council in Surrey. The Council effectively declared itself bankrupt by issuing a section 114 notice . The Council was run by Conservative administration until May 2022.
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| Woking Council website 7 June 2023 |
What is a section 114 notice?
Section 114(3) of the Local Government Finance Act 1988 says "The chief finance officer of the Council shall make a report if it appears to him that the expenditure of the authority incurred (including expenditure it proposes to incur) in a financial year is likely to exceed the resources (including sums borrowed) available to it to meet that expenditure."
The Section 114 Notice comes after MP Jonathan Lord (Conservative) said on YouTube that he has spoken with Lee Roley (local government minister), and Secretary of State Michael Gove. That Woking Council was in a difficult position and was being put under special measures meaning that Government appointed commissioners would oversee the running of the council finances.
What does Woking Borough Council say ?
On their website Woking Borough Council went on to explain the Council's position:
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| Woking Council explains it's bankruptcy |
They said that the council faces an 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. According to a report in The Guardian, things went wrong after the Council borrowed money to invest in hotels and skyscrapers in Victoria Square, Woking.
The Council has 21 days to respond to the notice and an extraordinary meeting of the Council has been arranged for Tuesday 20th June 2023. Woking council has a YouTube channel and this meeting may be available to view on a live feed