Bankrupt Woking given £500m bailout in merger plan

Ministers have agreed to give bankrupt Woking council an “unprecedented” £500m taxpayer bailout under plans to merge local authorities in Surrey.

- Richard Partington

In a historic intervention, the housing, communities and local government secretary, Steve Reed, said the government would repay a significant chunk of the debt owed by the former Tory-run local authority.

The bailout helps to smooth over the creation of two new councils in Surrey. Eleven district and borough authorities will be merged with the county council to create two “mega council” unitary authorities.

It is part of Labour's plans for the most far-reaching reorganisation of local government in England for decades in a “devolution revolution” to find efficiency savings and spearhead economic growth.

Woking declared itself effectively bankrupt two years ago after its former Conservative leadership ploughed vast sums of borrowed money into skyscrapers, a luxury hotel and other risky investments that turned sour. In one of the biggest financial failures in local government history, the local authority, which has been controlled by the Liberal Democrats since 2022, racked up debts of more than £2bn.