Bankrupt council expects government debt relief

Woking Borough Council says the government has agreed to "aid the reduction" of its multi-billion pound debt.

The bailout will initially cover the debt owed by the effectively bankrupt borough in 2026-27 but could be extended if needed, according to the Local Democracy Reporting Service.

Council leader Ann-Marie Baker said: "It marks an important step towards addressing our debt position as part of wider discussions on the future structure of local government in Surrey."

The Ministry of Housing, Communities, and Local Government has been contacted for comment.

Woking declared itself effectively bankrupt in 2023 with £2bn of debt, and has since increased council tax and cut services.

The problem has spilled into neighbouring councils after the government announced in 2024 that local authorities in Surrey would be reorganised.

The county looks likely to be reorganised into two or three single-tier councils.

The government has now committed to "supporting any new authorities in Surrey with the rationalisation of Woking's assets", according to a Woking Borough Council report.

This could include interim financial support and "further tranches of financial support for any remaining unsupported debt".

The council would still be expected to continue cutting costs and finding "best value" for taxpayers by selling off its assets, even after reorganisation, the report adds.

Ms Barker said that, "whilst there is much still to be agreed, this announcement provides a degree of certainty" for Woking's financial future.

"We are doing all we can to put our house in order by setting a balanced budget and having a strategic plan to sell assets," she added.

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