Opinion: What Does Woking Going Bust Mean for Guildford?

Published on: 9 Jun, 2023
Updated on: 13 Jun, 2023

Cllr Joss Bigmore

Joss Bigmore worked in the City of London trading and managing financial risk before becoming a councillor in 2019. His experience offers extra insight into the current financial challenges faced by local authorities.

By Joss Bigmore

leader of the Residents for Guildford & Villages Party and borough councillor for Merrow

The issuing of a Section 114 notice by Woking Borough Council, effectively signalling bankruptcy, is unfortunately not a surprise to many who have looked at their financial situation over the past few years.

The size of the losses are shocking, and taxpayers will be footing the bill for years to come.

The quantum of financial risk that WBC took is terrifying, suggesting failures in governance both locally but also in Westminster, where the Public Works Loan Board authorised loans on a scale that dwarfed the income streams of WBC.

Guildford Borough Council also faces serious financial challenges and naturally, in the wake of the Woking news, attention will turn to those.

In Guildford, although current debt levels are small and manageable, the borough council is about to embark on significant expenditure relating to four projects which will be largely financed by external debt in the hope that future receipts from property sales will repay the monies.

These projects have been in the pipeline for years and have been supported almost unanimously by GBC councillors of all parties from a number of historic administrations.

It is an enormously challenging time for all local authorities…”

Weyside Urban Village is a huge undertaking, in volves: moving a Sewage Treatment Facility, building a new GBC Depot, moving and upgrading the Community Recycling Centre at Slyfield, and significant highways works. The aim is to eventually facilitate the building of around 1,500 homes. But it is an incredibly risky project with current value at around £450 million.

GBC is also developing housing on the car park at Guildford Park Road, a project which will be in excess of £100million, building Ash Road Bridge at over £40 million, and a significant repair, and ultimately replace, programme at Guildford Spectrum leisure centre.

I am proud that under my administration, with work led by John Rigg, we added a huge amount of rigour to the governance and programme management of these projects.

We inherited a set of projects with variable governance approaches and an inconsistent approach to contingency and budgeting, which given the size of this capital programme was unacceptably risky.

If interest rates continue to rise and property prices fall, we will see a major impact…”

We also worked hard with our MPs, Surrey County Council, and the Local Enterprise Partnership to ensure we received significant grant funding to help deliver these projects. And we unashamedly employed expert consultants to help advise the council on how to manage the risks of these projects, being acutely aware of the consequence of failure.

But although we worked hard to mitigate the financial risks, they have not disappeared, and GBC is on a knife edge with interest rates at current levels. If interest rates continue to rise and property prices fall, we will see a major impact on the amount of money left to support services.

I hope there is sufficient skill and experience in the new Lib Dem administration to continue our work, although their efforts will be further complicated as the lead finance officer has recently resigned.

I am sure that many will ask why GBC continues with these projects but the reality is that it would cost a significant amount of money to cancel them due to contractual obligations or grant repayments.

Local Authorities are also the only body with the desire to provide the amount of affordable housing our communities need, and also help deliver the infrastructure upgrades we need across the borough.

It is an enormously challenging time for all local authorities, with reserves ravaged by the pandemic and recent inflation, and a government with no leeway for extra funding as it looks to rebuild our public finances.

Guildford is in a far better position than Woking, but poor, or ponderous decision-making in the years to come could quickly see us in a similar position.

Share This Post