Bankrupt Woking Borough Council is expected to ask the Government for “an eye-watering” £171 million to help it balance its budget.

If successful, the council share of tax would likely rise by 2.99 per cent – markedly lower than last year’s huge 10 per cent hike.

The government cash would cover £162.8 million in servicing its overhanging £2.1 billion debt and £2m to cover normal day-to-day costs of doing business as usual.

The process has been described as “one of the most difficult” budgets for any borough council to set.

The Monday, February 10 resource and finance scrutiny committee heard that moves to bring a fully balanced budget to the table would have devastated both the council and residents with mass compulsory redundancies and deep cuts to popular services.

Instead, it intends to hit that goal, unambitious as councils must by law be able to balance their books, over a three-year period by slowing raising fees and charges together with a less cliff edge reduction to services.

The situation, though far from perfect, has been described as “an entirely different place to last year”.

Stephen Fitzgerald, the council’s chief financial officer, told the meeting: “The budget proposals…are an important milestone on Woking ’s improvement and recovery journey.

“Anybody who has been reading the local government press or even the general press will notice there’s considerable turbulence in public finances and local government finance in particular.

“When we look at setting the Woking budget with our £2.1 billion of overhanging debt it could arguably be one of the most difficult budgets of any district level council in the country to set. To try to balance all the necessary things we try to do; to keep the council afloat as a going concern.

“Despite the difficulties I would suggest that this represents a positive move on our road to recovery.”

He added: “The overall general fund budget is a fairly eye-watering figure of £162.8 million.

This of course includes the servicing of the interest charges on our overhanging debt.” Whether the budget passes hinges entirely on the Government agreeing to exceptional financial support – with the council putting in a request for £171.1 million,” he added.

Mr Fitzpatrick said: “A positive response from central government is critical to the council remaining as a going concern and one of the reasons that we have to delay our council tax setting.

“We probably won’t get the secretary of state’s decision on exceptional finance support until early March and we can only legally set our council tax when we know we actually have resources to keep the authority as a going concern at that level of council tax, with that level of exceptional financial support.”

If approved the council is expected to raise its share of tax by 2.99 percent – this is separate to any Surrey County Council and Surrey Police increases.

The council is still going through the process of recovering what it can from running discretionary services – with community centres continuing to be transferred to external ownership. The council is also consulting on cuts to its meal provisions that would end breakfast and tea services.

There was still fear in the chamber on whether the council’s plan would work.

Councillor Stephen Oades (Liberal Democrats: Goldsworth Park) told the meeting the proposed budget still leaves a business as usual gap of £2.8m with the Government being asked to cover it.

He said Whitehall was being asked to go one further than last year and cover both the debt repayments and millions in normal running costs – raising the concerns over what would happen if the council’s request was turned down.

Cllr Oades asked: “What is plan B if the Government says ‘OK you get your capital directive and don’t have to report minimum revenue payments but we’re not covering your business as usual budget gap’?”

Cllr John Morley (Liberal Democrats: Horsell) added: “We aren’t living within our means yet.”

He said the proposed budget was “the best we can do in this scenario – but we should be clear about that we are working towards living within our means because we don’t want to mislead the public and let them think that everything is finished and everything is fine now because it’s not, there are still going to be difficult decisions and still going to be pressures.”

Councillor Dale Roberts, lead member for finance, speaking after the meeting, said: “We’re in an entirely different place to last year. All discretionary services are being maintained, housing and homelessness have become a crystal-clear priority, and council tax is assumed to be 3 percent, the general increase for district councils.

“Naturally, our budget is dependent on government support, but the administration is confident that it is continuing to do everything it can to address historic failings and achieve a balanced budget.”