The first public meeting discussing Woking Borough Council’s Section 114 bankruptcy took place last night as it began the long road to recovery, writes Chris Caulfield of the Local Democracy Reporting Service.

The mood in the civic chamber bordered on the morose as councillors and members of the public listened to senior officers talk of massive cuts to spending, services and public sector jobs.

The meeting opened with speeches from the council’s interim financial officer Brendan Arnold, who has been in post only since March 2023, and the borough chief executive Julie Fisher, before being opened up to the floor.

Council leader Ann-Marie Barker spoke first followed by each of the group leaders.

Much of what was said  was already familiar to many; that the council’s forecast debt of £2.6bn was built upon heavy borrowing or that councillors were given investment decision information which – years later – proved to be inaccurate.

However, the meeting was an important stepping-off point for the council as it begins the years-long journey of deep austerity to show it has done everything in its power to cut spending and balance its finances – crucial if it is to be bailed out by the government.

Here are five key takeaways from the meeting.

Officers, led by interim head of finance Brendan Arnold, have begun the root and branch review of their finances and are working on a recovery plan to achieve stability. The council has also appointed independent auditors to carry out a forensic review.

Mr Arnold said: “This review has reached a point where the council’s financial position is understood. 

“However, further work lies ahead and so the figures in the Section 114 notice are likely to change moving forward. 

“It’s in the nature of these things that figures are more likely to get worse than to get better.”

Members also agreed to eight recommendations from Julie Fisher that included bridging “a £10 million budget gap in 2024/25” previously reported as £9m, creating an asset disposal strategy, and approaching central government for financial support.

The council will develop a strategy to offload its assets. It directly owns 385 sites and buildings in Woking as well as others via its private companies.  Of those, 26 are listed as vacant and 131 are occupied by the council.

Offloading the vacant sites, including pubs the Anchor and Robin Hood, is one option, while a consolidation of council services could reduce its need for office space.

The council’s most high-profile asset, the £750m town centre Victoria Square development, would likely generate the most money – but, after having had its value written down by £400m, would come at a huge loss.

Drilling deeper into the council’s list of assets, it could sell a power plant in Milton Keynes, or even cutlery it has supplied to the yet-unopened Woking Hilton.

Cllr Barker said: “We will be looking at the best use of the council’s asset base to reduce the impact this huge borrowing and deficit has on public funds.

“This will involve a strategic approach to sell assets or to get more out of assets.”

The council says it cannot afford to pay off its bills. According to its own figures, it makes about five times less in council tax than the annual cost of serving its debt. It says its only choice is to seek a government bailout.

Deputy leader of the council Will Forster said discussions needed to start soon but first they must “earn the trust of the government and regain the trust of our residents. We need to put our own house in order and clearly show we can live within our means in the future.”

What that means is cutting staff and budgets – and the axe will fall on non-statutory services. This could be anything from valuable meals on wheels services, arts funding to crime and safety.

Julie Fisher said: “The council will need to demonstrate it is doing all it can to set its house in order.

“This is likely to imply firstly agreement to very significant service and cost reductions to offset at least some of the budget pressures.

“Woking Council will become ‘smaller’."  

Julie Fisher said savings though would need to be made “right across the council and also ensure we take every opportunity we can to modernise our services to create efficiencies wherever we can.”

She added any government support will be absolutely contingent on the council demonstrating to DLUHC that it has  done everything to deliver financial sustainability to support its own financial recovery.

Spending controls will “remain a feature of how the council conducts its business for quite some time.”

Cllr Kevin Davis, leader of the Conservative group, said: “This is going to be a punishing for some people, particularly those in roles that are beyond the non-statutory side of things.

“I desperately hope we do our best by the staff.”

The secretary of state stepped in because Woking Borough Council was “failing” in its duty to provide best value and appointed commissioners who will stay in place for five years.

Julie Fisher said: “The period of intervention of five years reflects the scale and complexity of the issues facing us.”

She said she welcomed their appointments as the experience they have will “bring greater pace” to the recovery “providing confidence to government and residents".

The first edition of the council’s recovery plan will be taken to committee in August for agreement before being submitted to ministers.

Saving proposals will come sooner and taken to the executive and full council next month.

Councillors and officers must work together to help set Woking Borough Council back on the right path, but that hasn’t stopped political sniping.

Ann-Marie Barker said: “Uncovering the truth about Woking’s finances and actions to limit borrowing were started by Liberal Democrats several years ago.

“Prior to taking control of the council, we prevented loans to a private school, we objected to a proposed quarter of a million pound loan to a developer who had plans for Kingfield Stadium, and to a grant of £100,000 to RHS Wisley, a national charity located outside the borough of Woking.”

Cllr Steve Dorset (Pryford Con) said: “We’ve had a party political broadcast going on.”

He said the Lib Dem election material said they would tackle the debt but the issuing of a Section 114 notice suggests they failed.

He then pulled out a printout of the News & Mail showing Lib Dem councillors from 2012 standing next to Ray Morgan and Vince Cable and celebrating how they borrowed to invest in the town.

Cllr Hassan Akberali (Knaphill, IND) said: “I hope the council can pass a motion calling on government help as the government is equally culpable in inflecting a bleak future on the present and future generations of Woking residents.

“If you think about it, it is a direct result of the austerity measures introduced by the coalition government in 2010 and has been relentlessly pursued since.”