Woking council declares itself effectively bankrupt with £1.2bn deficit after risky investment spree involving hotels and skyscrapers
The overall value of the assets the council invested in have been written down, meaning its expected deficit is £1.18 billion, 107 times greater than the amount it raises in council tax each year at £11m.Under the section 114 notice all but essential council spending is immediately halted to ensure vulnerable residents are protected.
The Liberal Democrats have run the council since 2022. Prior to this, the Conservatives were in control and implemented the investment strategy. "Difficult decisions will lie ahead as we seek to balance the council's budget and address the unaffordable debt."Croydon council in London issued its third section 114 notice in November 2021, while Thurrock in Essex took the step in December last year after it got into difficulties over borrowing large sums to invest in solar energy.
"Further detailed investigation is needed, but based on what has been reported, the areas of weakness are financial management, governance, leadership, and scrutiny and challenge."
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