Woking’s £1.9bn regeneration schemes make it UK’s ‘most indebted local authority’ in proportion to its size
Ministers have appointed commissioners to help a Surrey council figure out a long-term financial plan after two major regeneration schemes left it in a financially precarious position.
Woking Borough Council’s Victoria Place and Sheerwater regeneration schemes have saddled the authority with a combined £1.9bn debt, while further capital-financing requirements push the authority’s total debt figure up to £2.4bn.
A just-published review, commissioned by the Department for Levelling Up, Housing and Communities, said the annual cost of financing the debt was £62m – in contrast to the authority’s annual budget of £24m. It said the situation made Woking “the most indebted local authority relative to its size in the UK”.
The review said that while the cost of servicing the debt had been “relatively constant”, the covid-19 pandemic and the current economic climate had hit the authority’s commercial income and revenue from car parking. The report added that the cost of servicing the debt was forecast to grow, and that the council lacked the commercial skills and capacity “to identify a longer-term strategy to resolve its commercial arrangements”.
In a letter to Woking BC chief executive Julie Fisher, DLUHC deputy director for local government stewardship Suzanne Clarke said secretary of state Michael Gove believed there was a “pressing case” for urgent government action to protect the interests of taxpayers and residents.
The letter said ministers had chosen to intervene because of the scale of the commercial and financial risks facing Woking and the authority’s “failure” to provide assurance over the adequacy of the actions it is taking to deal with the situation.
Woking BC has been run by the Liberal Democrats since last year. Before that it was run by a minority Conservative administration.
Current leader Ann-Marie Barker said the authority recognised the challenges it faced were “so significant” that they could not be dealt with in-house.
“I know that councillors and officers will work at pace alongside the government-appointed commissioners to address the issues identified in the report and achieve best value for the public purse through the preparation and delivery of an action plan,” she said.
“When my administration gained control of the council last May, I pledged to take on the challenge of major change and embed affordable, responsible and sustainable principles into how the council conducts its future business and this remains my priority.
“As part of this pledge, we have taken steps to control borrowing, made changes to the governance of our commercial investments and I have instigated independent reviews of all the council’s borrowing and investments.
“I recognise we need to deliver our plans for recovery of the council’s finances with greater pace and urgency and we face difficult decisions in the months ahead.”
Victoria Place in Woking town centre features around 11,000sq m of new retail space, 429 apartments in 30 and 34-storey towers, and a 189-room Hilton Hotel that is 22 storeys tall. The project, which was completed in March last year, is a joint venture between the borough council and shopping centre owner and investor Moyallen Group. Benoy was masterplanner and architect.
Woking BC’s wholly-owned ThamesWey Developments is behind the regeneration of the 1950s Sheerwater estate. It secured planning permission for up to 1,142 homes as part of the project in 2019. BDP is architect.
The housing element of the project is now known as Canalside. The wider Sheerwater regeneration scheme includes a £20m leisure centre by Pozzoni Architecture, which was completed in 2021.
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