Residents have been reassured that a £10 million loan from Wokingham Borough Council to debt-riddled Woking Borough Council is protected and will be repaid.
A report by the Local Government Chronicle noted how the ailing Surrey borough received more than £40 million from various local authorities since it revealed it was experiencing financial difficulties earlier this year.
Data obtained via a freedom of information request and shared exclusively with the publication showed Woking had borrowed £280 million in just over 18 months. A third of that remains outstanding.
In February 2023, Woking Borough Council issued a public statement warning it was in “section 114 territory”. It was put under statutory intervention by levelling up secretary Michael Gove in May due to levels of debt. It issued a section 114 notice on June 7.
nder the Local Government Finance Act 1988, if a council’s chief financial officer believes the authority cannot meet its expenditure commitments from its income, they have to issue such a notice.
Wokingham Borough council made a £10 million loan to Woking Borough Council on June 8, according to the report.
Graham Ebers, deputy chief executive and chief finance officer for Wokingham Borough Council, said: “Our loan deal with Woking Borough Council is protected by Local Government legislation, and Woking’s Section 114 statement confirms it will repay all maturing loans – accessing support from the Public Works Loan Board if necessary.
“This is consistent with the broader picture of local authorities honouring their inter-authority loan repayments regardless of their financial circumstance.”
