More details on our finances

Lowest funded council in UK

• Residents in the area get the least funding from central Government per person of any unitary council (which provides all residents services) in the country

• Compared to other areas, residents in Wokingham Borough get more than £400 less per household each year towards their services than if it was funded in the same way as the average unitary authority

• This is £30million per year in total

• It means the borough's Council Tax payers will continue to make a higher percentage contribution to services than any other unitary authority

Lending money to Woking Council

We have lent four councils money this year as part of our Treasury Management Strategy. It is only because Woking has an section 114 notice.

This is what happens when a council goes bankrupt. Because of this and Woking's significant levels of debt, this is getting a lot of interest.

Normal financial management

Lending and borrowing money for short term loans happens regularly with all councils in this country.

It is standard practice and has been carried out every year for at least 20 years. In terms of this loan we get a better rate of return than we would from a bank or any other source.   

The £10million from Woking is due to be returned in March 2024.

The loan is for nine months and the council will get over £350,000 in interest on the amount lent. 

A secure loan

As councils provide statutory services all of our citizens need, they are legally not allowed to go bankrupt in the same sense that a business does.

Woking Borough Council is underwritten by the Department of Levelling up, Housing and Communities. The department is responsible for ensuring that all of Woking’s contracts and debts are paid.

Local councils are considered to be extremely safe places to invest because of this reason, regardless of their own individual financial status. Central Government offers the security.

Spending on local services

The £10million is largely made up of housing developer funding and grants that is eventually intended for building infrastructure.

It cannot be used for anything else, but if we are not using it immediately, we are free to lend it other councils for short term loans. 

Lending this money will only be a positive impact on our Council Tax. The £10million is considered extremely safe because of government underwriting of local councils.

Councils are not like a business, because of this factor.

We stand to gain a £350,000 interest payment that will help manage the shortfall in our current budget. 

Other council debts

Our total debts are being paid at a much lower interest rate.

Our Treasury Management Outturn report is being presented at our Executive Meeting on Thursday 28 September and there is a lot of detail in there if you are interested. 

Voting on loan arrangements

The Treasury Management Strategy was voted on by the Council as a whole in February 2023.

It allows the Chief Financial Officer to make loans of up to and including £10million to councils which ask.

Because of the safety around lending to councils, it has been managed like this for more than 20 years and this has never been a problem for any council. 

Our accounting is audited both internally and externally and this kind of loan has never been considered a risk.