WOKING Borough Council is in danger of being ‘‘overwhelmed’’ by a toxic combination of existing loan repayments, falling asset values and a lack of income from investments.

In another stark assessment of the council’s mountainous debt and the problems surrounding its financing, the governing Liberal Democrats say that even difficult financial choices may not be enough to provide for growing investment losses.

Although the Lib Dems say that they have ‘‘narrowly’’ set a budget for the coming year, 2023-24, they also argue that making funds available to repay council-company debts makes future annual budgets ‘‘very challenging’’.

For the moment at least, the council has avoided having to declare a Section 114 notice, the equivalent of bankruptcy, although local authorities cannot in practice go bankrupt.

However, a meeting of the council executive this evening will be told that a balanced budget for 2024-25, when council debit is forecast to reach £2.4 billion, is not expected to be achievable, suggesting a Section 114 is a problem deferred rather than solved.

The report adds that the borough has financial challenges unlike other local authorities, such as huge loan repayments unsupported by enough income.

Woking borough, it notes, has the highest level of council debt per household in England. 

Annual debt repayments in excess of £60million are more than five times its revenue from council tax.

Cllr Ann-Marie Barker, the council leader, said: “Tonight’s report points out what many residents have feared all along – that borrowing was wholly disproportionate.

“The previous administration continued to borrow without adequate consideration for how to find the cash to make regular year-by-year loan repayments.

“We are looking to a future where Woking is a successful council, not a failing bank. This could take decades, and certainly will involve years of emergency measures.”

Cllr Dale Roberts, the council’s portfolio holder for finance and economic development, added: “Beyond setting the budget our focus is on resolving how much the council should have been setting aside to repay its loans. The scale is overwhelming.

‘‘The council has borrowed £1.5billion from the government to lend to its own subsidiary companies, ThamesWey and Victoria Square Woking Limited.’’

 The council is expecting hear within the next four weeks from the Department and Levelling Up, Housing and Communities over its review of the council’s finances.