Guildford Borough Council is bringing in “strict spending controls” to get its finances in order and prevent going the same way as Woking.
Will ‘Your Waverley’ be next?
Waverley & Guildford Councils’ statement on future partnership.
The recently elected Lib-Democrat-controlled Guildford authority, linked with Waverley, is attempting to head off a Section 14 notice, which would declare itself bankrupt, by setting a special budget.
Problems have arisen due to the previous Conservative administrations carrying out “high levels of borrowing” exacerbated by Government issues. Including rapid interest rate rises following the budget by former Prime Minister Liz Truss and Kwasi Kwarteng and a delay in council account auditing.
The new administration said spending controls would be brought in immediately, limiting all new spending, and major projects and borrowing would be reviewed. It would also look at selling council assets. Recovery plans also include “expanding and strengthening” the council’s finance team and continuing its collaboration with Waverley Borough Council to reduce costs.
The authority has warned it may need to consider issuing a section 114 notice, effectively declaring itself bankrupt, ahead of a full council meeting in October; however, relying on its reserves should avoid having to issue the dreaded notice. A move nearby Woking was pursued last month due to a forecasted £ 2.6 billion debt and a £1.2bn deficit.
It has admitted it is “in a very difficult financial position”.
The Guildford Lib Dems, who won control of the council in May’s elections, said rising interest rates and accounting issues unearthed by a review of council finances had contributed to the situation. A special meeting of the authority’s corporate governance and standards committee will outline the plans next Tuesday, July 18.
The special budget, which councillors will consider on July 25, will aim to get the council’s finances in order and include “strict controls on all new spending and in-year reductions”.
The Guildford Lib Dems said
‘Our residents will always be our highest priority
“Above all, we will not shy away from making the tough decisions to make sure residents are protected from cuts to core services. Our residents will always be our highest priority, and we will be honest and realistic about the choices that need to be made to keep the council financially stable.”
Council’s leader, Cllr Julia McShane (Lib Dem, Westborough), said though she knew the report was “a difficult read”, the council wanted to be open and transparent about the challenges ahead.
“We have issued a report today related to our finances and I am aware our residents may find this worrying.
I want to reassure everyone we are taking this situation very seriously. I take comfort in the fact that officers and councillors are working hard to tackle the situation head-on.”
Guildford’s former leader, Cllr Joss Bigmore (Residents for Guildford and Villages, Merrow), said the budget was delivering on what the previous administration had started at the end of the last financial year. He stressed the council was “nowhere near” the situation of nearby Woking, which in June issued a section 114 notice.
He said a full review of the finances had shown some errors in the accounts.
Cllr Bigmore added: “That’s made the situation even more urgent.” With overall debt of around £300 million, expected to rise further, council documents show the authority can balance its 2023/24 general fund budget, using reserves if necessary, which should prevent the need for a section 114 notice in the current financial year.
The former leader, who was in charge for two years as part of an arrangement with the then Residents and Lib Dem coalition, said:
“Our balance sheet is very solvent. It’s just a matter of managing cash flow to manage the interest payments. With strong leadership and decisive decision-making, it should be no problem.”
Conservative group leader Cllr Philip Brooker (Worplesdon) said he had not seen the meeting papers but believed the council could reduce the “significant amount” spent on consultancy fees.
He said the situation was extremely concerning.” The corporate governance and standards committee will be at 7 pm on Tuesday, July 18, at the council’s Millmead offices.
Sale of assets.
MeaninglessMud was rather unpopular when he suggested only a couple of months ago that Follows plans for the centre of Godalming, whilst drastic, were probably his only course of action.
Thus.
It has come to pass.
The property portfolios will be emptied and services stopped.
Most of the functions of the council will be terminated.
Grim.
It would probably be better to go for 114 status. At least the pressure, to an extent is transferred to the appointed administrators. The savage cuts are the same but the ire is deflected.
The problem is this. The people who read WW are the engaged. Whatever their opinion. The majority are not. Yet the majority is about to feel the consequences of a situation years in the making. Any attempt to blame COVID war in Europe the climate changing, isn’t going to cut ice.
More people are going to suffer.
More people are going to die.
Our charitable agencies are at full stretch
Food banks cannot get enough food.
We watch as developers encourage hordes to live in villages without basic utility provision. In turn our schools and welfare system break.
The majority just expect done idy else to do everything for them. It’s going to come as a shock when nobody does. Like the closing if village halls. The somebody else’s won’t be there anymore. Places services are stopping now, forced by Govt legislation falling on the few and the few rightly saying”stuff it”.
The not getting involved brigade is going to have ansty shock when all they didn’t want happens and if course that is the moment they wake up the fact the ship has long sunk and they are about to drown
A 114 notice is not a bouyance aid. It tells you how far it is to land and you then workout who isn’t going to make it.
Where the boroughs go, the County follows.
MeaninglessMud
The unwinding of rapacious money printing was forecast as “going to be difficult” as some have now begun to notice. Local authorities might also have a very unwelcome surprise from the Pensions Actuary in 2024, which deserves their attention.
The following Government guidance seems to have been ignored by too many.
“Local authorities should consider the most appropriate indicators to use, given their risk appetite and capital and investment strategies. Whilst this guidance does not prescribe specific indicators or thresholds, the indicators used should be consistent from year to year and should be presented in a way that allows elected members and the general public to understand a local authorities’ total risk exposure from treasury management and other types of investment.” Unfortunately, the general public have not been given sufficient awareness of the risks taken with their money.
In June 2023 the Local Government Association advised good democracy requires “getting the citizens to realise that they are the democratic masters and recognising that those in council chambers are the democratic servants.” Insufficient transparency has unfortunately engendered financially dangerous public disengagement.