CIPFA comment: Woking Borough Council issues section 114 notice


In response to Woking Borough Council issuing a section 114 notice Rob Whiteman, CIPFA CEO, said:

“Today’s section 114 notice from Woking Borough Council highlights the risks associated with borrowing on this scale. Borrowing must always be proportionate and this is an extreme example of what happens when that principle is ignored.

“This is a dark day for everyone in the local government sector and there is no doubt that the framework for accountability and improvement has failed. Further detailed investigation is needed, but based on what has been reported, the areas of weakness are financial management, governance, leadership, and scrutiny and challenge.

“Clearly the controls put in place by the Prudential Code were not followed. This was only recognised recently by the incoming CIPFA qualified finance director who immediately raised the alarm, as we would expect from our members. While his actions have prevented further loss of public money, this again highlights the need to implement the recommendations of the Redmond Review and ensure we find a swift and effective solution to the current audit crisis, with both preparers and auditors of accounts having specialist public sector knowledge and skills.

“We need to work harder to prevent this happening again and understand how this small district council was able to operate under the radar for so long.

“Much of local government has a proud heritage in local regeneration, but their involvement is selective and proportionate, and aligned with strong public sector financial management and governance. It seems that this effective decision-making framework was lacking at Woking Borough Council.

“Difficult decisions need to be made at Woking while the council looks to rebuild both its financial resilience and its reputation. CIPFA, in agreement with the external assurance review, recognises that the council cannot do this alone and will need the support of both central government and its peers over the next few years.”

Notes to Editor:

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