WOKING Borough Council is facing bankruptcy unless a balanced budget can be agreed by February.

Although the scale of council debt has long been known and debated – it is forecast to reach £2.4billion by 2024-25 and has attracted the concern of central government – this latest appraisal by the majority Liberal Democrats is the bleakest assessment yet.

With the council, in their words, “close to running out of money”, the Lib Dems propose launching Operation Recovery “to rescue Woking”.

Woking councillors face serious decisions for the future of the borough. (Tindle)

While local authorities cannot officially go bankrupt, they are effectively in that position as they declare a Section 114 notice, under which all non-essential and statutory spending is stopped.

The News & Mail understands that if savings cannot be made, and a budget set, the council will go into Section 114.

Cllr Ann-Marie Barker, leader of Woking Borough Council, said: “The financial challenges faced by the council are significantly more serious than anticipated and we find ourselves in a critical situation.

“The situation we inherited means that difficult decisions need to be taken to secure the long-term future of Woking.

“To achieve a balanced budget for next year, we must fundamentally review expenditure on all services to identify savings.

“I have launched Operation Recovery to do all we can to rescue Woking from this dreadful situation.

“The independent financial review, secured in opposition, highlighted serious risks which the Conservatives did little to tackle.”

The Lib Dems see the root of the problem as “years of financial mismanagement by the Conservatives”, but as exchanges become increasingly feisty the former administration is mounting a determined defence of its record.

Having accused the Lib Dems of “staggering hypocrisy” for raising the borrowing requirement for the Victoria Square development by £45m, the Conservatives detailed their latest response for the News & Mail.

“When the Conservatives left office in May, the council had net asset value of £150m, was halfway to restoring its reserves post-COVID by 2025-26 and had no difficulty setting a balanced budget,” said Ayesha Azad, the Conservative leader.

“The Lib Dems and their Labour and Independent allies have had a majority in council since 2019. So while they want to blame the ‘Conservative administration’, everything we did between 2019 and 2022 was with Lib Dem consent and co-operation.

Cllr Ayesha Azad defended her party's financial record when it ran the council. (Tindle)

“When we tried to reduce the pressure on budgets last year by increasing charges and reducing grants, the Lib Dems in opposition forced us to change tack – and then put out leaflets condemning us for the increases we did make, which are dwarfed by those they are making now.

“Perhaps they are now regretting some of their big promises and rhetoric.

“While ‘Operation Rescue’ tries to invoke the spirit of Dunkirk and promote the idea that they are the heroes, the reality is that the Lib Dems are largely rescuing Woking from the first disastrous six months of their own leadership.”

While the parties trade blows, a sobering assessment of the financial situation was delivered by the council’s finance director Leigh Clarke.

In a document considering the council’s medium term financial strategy and presented to the council Executive, the section headed Executive Summary noted the need for “additional assurance on the financial position for each of the years 2023-24 to 2025-26 to provide assurance the expenditure can be contained within resources.

“If this is not possible, the council will need to commence discussions with the government on financial support and the finance director will determine whether a Section 114 report is appropriate.”