What measures are in place to stop Wokingham Borough Council from going bankrupt? That’s the question one councillor has asked the body responsible for monitoring the council’s financial management.

Councillor Gary Cowan asked the question after a number of councils in recent months have effectively declared themselves bankrupt – or said they’re soon at risk of doing so.

Councils across the country face a squeeze on their finances due to rising costs, and to what many say is low government funding.

Slough Borough Council effectively declared bankruptcy in 2021, and neighbouring Windsor and Maidenhead has said it is “doing everything we can” to avoid the same fate.

Councillor Cowan said: “With more councils going bankrupt the Local Government Association and the Chartered Institute of Public Finance and Accountancy have serious concerns on the management of Councils’ finances.

“In these very difficult times, what urgent transparent actions has the audit committee added so as to guard against increased risks to Wokingham Borough Council going bankrupt?”

Councillor Cowan put his question in writing to a meeting of Wokingham Borough Council’s audit committee on Wednesday, September 27. This is the group of councillors responsible for overseeing how the council manages its finances.

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As he wasn’t present at the meeting, the committee instead said it would send him a written answer. But at a meeting last week, councillor Imogen Shepherd-DuBey said the council faces tough financial challenges.

She said: “All councils are finding their finances are being subjected to difficult, unprecedented inflation, and we particularly receive inadequate levels of grant funding from central government.

“Councils across the country are having to make unpopular decisions as we are doing just to keep going.”

But councillor Shepherd-DuBey defended the council’s financial management – after questions were raised about a loan to Woking Borough Council – which effectively declared bankruptcy in June this year.

She said: “We have actually loaned money to four different councils this year and it’s a very common practice for councils to lend each other funds and it’s been routinely happening here without incident for more than 20 years.

“These loans will bring in over a million pounds of interest by the middle of next year and will help us plug our revenue deficit.

“Investing in councils is not the same as investing in most businesses. This is because councils provide statutory services and are underwritten by central government using public works loan board loans. Their existing contracts and financial commitments will be paid.”

She added: “In the Woking example we are getting the £10 million returned in March with an addition of £350,000 worth of interest.”