A loan made by Wokingham Borough Council to nearby Woking the day after the Surrey council declared bankruptcy will be repaid on Friday (March 8).
On June 8, 2023, Wokingham loaned Woking £10 million 24-hours after it had issued a section 114 notice, the local government equivalent of bankruptcy.
A Woking Borough Council spokesperson told Wokingham Today: “The loan will be repaid as per the terms agreed.”
In addition to the £10 million, Wokingham will also receive interest of £323,000.
There was controversy surrounding the loan, including questions that were raised at a full council meeting earlier this year.
Cllr Imogen Shepherd-Dubey, executive member for finance, said at the time how there had never been a situation where a council in a Section 114 state had defaulted on its payments.
She added that a council defaulting on its payments would only happen if central government was unable to cover the costs.
“It doesn’t matter to us whether a council is in a Section 114 state or not because it’s all underwritten by the Treasury,” she said.
