By Chris Caulfield

local democracy reporter

The ghosts of Woking’s disastrous investment strategy, that bankrupted the borough council and cost jobs, services and tax rises, are beginning to be laid to rest after three of its failing companies were set to be sold – but at cost.

The council will lose control of more than 1,000 homes when it sells its housing wing – with tenants promised these will be sold to a social housing investor to maintain the properties the “way” the council would have wanted.

In 2016, the borough council went on an unprecedented spending spree with the fallout being more than £2 billion of debt, as project after project failed to deliver the returns needed to pay back the vast sums borrowed.

The ramifications are still being felt across the borough as it looks to pay back its loans and sell off assets to become less of a burden on the newly formed West Surrey Council into which it will be merged next year.

That process took a major step forwards last week after moves to sell three of its companies were put into motion – the first to itself.

Thameswey Energy Limited is set to be fully taken over by the council after three years’ work to get to this stage. It will do so in a debt for equity swap – taking shares in the company instead of being repaid.

A formal offer of £1 will ensure the transaction.

The council decided to take full ownership of the firm as it is the sole energy supplier to the Victoria Square development – itself to be sold. Keeping the power company in-house would give “surety” to prospective buyers that the lights would be kept on.

The disposals, Cllr Dale Roberts (Lib Dem, St John’s) told the May meeting of Woking’s Executive committee, were part of a “coordinated programme designed to simplify company structures, reduce commercial risk, support debt reduction, facilitate asset disposal and underpin the wider recovery program agreed with government.”

Part of the three-year time frame, he said, was to allow the council to “unwind” the firm’s financial arrangements.

The company provides critical energy infrastructure serving homes, business and  key town centre assets.

Leader of the council, Cllr Ann-Marie Barker  (Goldsworth Park) said the energy firm was put on sale as it was believed others could operate it better than a local borough council.

“But it became clear that due to the arrangements, and the way that the Victoria Square operation was set up, the energy in there was very much embedded as Thameswey Energy without an alternative and will be important for us to be able to provide surety to any buyer that the energy supply would continue”, she said.

Other companies are set to be sold to outside firms – although the prices have been kept confidential at this stage.

Thameswey Housing Limited will be sold to a social housing investor the council has said.

It was originally created to provide affordable housing in the borough but private companies such as Thameswey Housing were exempt from receiving grants – so instead had to build estates with a mix of market rate homes to subsidise the non-market housing.

Its sale will mean around 1,300 properties under Woking Borough Council control – via its company – will be lost.

Cllr Louise Morales (Lib Dem, Hoe Valley) said: “I’m really hoping that we can find a really tight way of securing that non-protected affordable housing, rented at affordable prices, are protected because they came into the system with set rents, and it would be really devastating to a lot of people across the borough… if it suddenly doubled overnight.”

Cllr Ann-Marie Barker reassured the meeting: “We’re not going out there and saying we are just going to sell these properties to the highest bidder and give no surety and no control to the people living there.

“We are looking for somebody who will maintain those properties in the way that we would have wanted.”

The final sale will be Victoria Square, Woking, which will be offloaded as a single entity to avoid additional complexity, reduced deliverability, and leave more extensive on-going arrangements to be managed by the council.

The Marches residential development, hotel complex, Henry Plaza and Victoria Place Red and Green car parks, will be marketed as a single freehold package.

The council hopes this will maximise market interest, simplify the transaction, and provide clearer and more deliverable routes to divestment and disposal.

Freehold of the car parks would be sold but long -term leasehold arrangements would allow council to maintain income.