Sun, 03 Dec 2023

'Royal' UK borough declares it's nearly broke
02 Oct 2023, 06:14 GMT+10

Berkshire council, home to Windsor Castle, is more than $240 million in debt and is running a high risk of insolvency

The United Kingdom's Royal Borough of Windsor and Maidenhead is on the brink of bankruptcy as the country's increasing interest rates have sent the cost of servicing its debt of Pound 203 ($240 million) soaring.

The local authority in Berkshire, which includes Windsor Castle within its catchment, has overspent by more than seven million pounds (over $8.5 million) so far this year, councillors were told on Saturday.

On top of this, it is budgeted to overspend by another Pound 6.2 million in the financial year 2024-25.

"Historic spending decisions on council tax and borrowing, weak financial management and low financial resilience over the past decade - coupled with macroeconomic pressures such as inflation - have made the council's position vulnerable," Finance councillor Lynne Jones said, according to the council's website.

The latest challenges are attributed to increasing demand for adult social care and to high levels of inflation.

Sorting out the council's finances will be the top priority for the cabinet until a stable financial position is achieved, according to Jones, who pledged to do "everything we can" to avoid issuing a Section 114 notice, which would effectively declare the council bankrupt.

"However, the situation is complex and challenging, and it will take time to pull this around," she added.

The Windsor and Maidenhead council is the latest in a series of local authorities that have fallen into financial insolvency over the past two years. Neighbouring Slough Borough Council declared a section 114 notice in 2021. Other councils around the country which have admitted inability to meet their spending commitments in the past few years include Croydon, Thurrock and Birmingham.

For more stories on economy & finance visit RT's business section


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