Even if bankrupt Woking Borough Council sold everything it owned it would still be more than £1.5 billion in debt.

The huge figure was published as part of the ongoing reports government commissioners must produce on the broken borough as it goes through the painful process of rebalancing its books.

It said that while the council, which declared itself bust in 2023 of the back of a disastrous regeneration programme that saddled residents with huge tax rises and massive service cuts, was taking steps to sell off its assets but the level of debt was still such that it needed significant government support.

The report, published on March 6, said that the council had a core spending power of £16.9 million a year – but servicing its £2.1billion debt was costing £1.3 million a week in interest alone.

The report read: “Even if everything else could be disposed of, the level of overhanging debt would still be significant, over £1.5 billion, as the level of debt far exceeds the value of assets.”

It added that some assets, such as the council’s social housing which was valued at £400 million had to be retained.

However, if the council did nothing, the annual interest costs and loan servicing would average £70 million and £73 million a year respectively “which would add significantly to the level of debt.”

The council was granted Exceptional Financial Support for the next two years which will allow it to cover the interest and other revenue costs.

However, the commissioners warned: “With no ability to repay the exceptional financial support through asset sales, let alone all the legacy debt, the position is not sustainable.

“Work is underway to determine the best exit strategy from the commercial legacy, which we are engaging with government on, and it is recognised that a long-term financial solution will not be in place for the 2025/26 budget process.

“However, the current position is not viable and commissioners are keen to continue engaging with government on the route forward.”

Responding on behalf of the Ministry of Housing, Communities and Local Government was Baroness Taylor of Stevenage who said that despite the bleak situation, the department was reassured Woking Borough Council was committed to radically overhauling its operations.

Serious concerns remained over the task ahead and potential impact on the impending reorganisation of local government – the dissolution of Surrey’s boroughs, districts, and county council and replaced with either two or three larger unitary bodies with an elected mayor.

Baroness Taylor wrote: “I share your concerns about the capacity of the council to deliver this programme of change and encourage you to work with the council and the ministry to consider how we can best enable the council to improve, for the benefit of residents.

“We have been clear with councils in Surrey that commissioners have a vital role, not only in supporting Woking to continue to improve, but also in responding to the invitation to all principal authorities in Surrey to provide proposals for local government reorganisation, to ensure that proposals are robust.”