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Cash-strapped council to reduce homes in regeneration scheme by 58%
Woking Borough Council commissioners have called its financial position “very difficult” as it revealed cutbacks to a regeneration project, including reducing the number of homes from 1,142 to 472.
In the first report since Woking Council issued a Section 114 notice in June, bringing it under government intervention, the local authority is said to remain in a “serious position” on its outstanding debt, which sits at £1.9bn.
Woking’s Housing Revenue Account is facing an in-year deficit of £1.5m, a figure which commissioners said is likely to get worse as the year progresses.
The council has also confirmed a plan to cut numbers of homes in its Sheerwater scheme from 1,142 to 472.
Councillors approved recommendations to seek an additional £57.7m in government cash to finish phases under construction before bringing an end to the project.
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In the commissioners’ report, it emerged that Woking’s financial situation has become worse since it declared itself bankrupt, and their “sense is that there could be more to come”.
The report said budget monitoring for the coming financial year indicated “increasing projected overspend in year to date, due to corporate financing costs, further underperformance of commercial assets and overruns in some departmental budgets”.
The commissioners concluded: “There is still much to do, and some issues will take a long time to resolve.
“The asset rationalisation strategy is in its infancy and despite recent best efforts, there is a need to update financial systems and reporting mechanisms.
“The position of the wholly owned council companies and joint ventures is being evaluated and this is not a straightforward task.”
Ann-Marie Barker, leader of Woking Council, said she agreed with the commissioners’ assessment of the situation and that they were “right to draw attention to the severity and uncertainties that remain around our financial position”.
She added: “The council continues to work hard to understand the full implications of our situation, while also taking the necessary steps to manage our current and future budget overspend.
“This is a key focus as we work towards setting our 2024-25 budget, ensuring that the council learns to live with within its means and achieves financial sustainability. This will inevitably involve difficult decisions in the coming months.
“I am pleased that the commissioners have recognised the important progress the council has made in adopting a robust improvement and recovery plan, and how we are determined to become a smaller, more efficient council focused on delivering core services to residents.
“Commissioners have also acknowledged how elected members and officers have worked with them in an open and transparent way, and we look forward to continuing to work in partnership to achieve financial stability in the future.”
Inside Housing revealed in March that Woking Council had delivered just 243 new build affordable homes throughout the period it had racked up the nearly £2bn in debt.
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