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As England’s Local Councils Get Crushed Under Massive Debts, The Socio-Economic Present and Future of The Locals Looks Threatened

The flashy Victoria Square development, with two boasting skyscrapers and a shiny new Hilton Hotel, was envisioned to be a representation of a bright economic future for the townsfolk of Woking, but as these structures stand frozen in time, unfinished and uncertain, they are now nothing but a reminder of the unexpected COVID pandemic and the miscalculated financial bets made by the local councils that went horribly wrong.

 

The Indebted Councils 

The Woking Borough Council is currently left with borrowings of £2.4 billion after they suffered a combination of cuts in funding from central government, higher interest rates, Covid, and most importantly high bets on commercial real estate. This number seems harrowing compared with the council’s net budget of £24 million. The Woking Borough Council became the first council last year to issue a declaration of bankruptcy after being declared England’s most indebted council in relation to its population. Thus, in order to stay afloat amidst these financially difficult times, the council is being forced to reduce costs allocated to key services.

 

However, the Woking council isn’t suffering alone. It has been reported that Birmingham and Nottingham are also set to release their reduced financial plans after independently issuing Section 114 (which is related to bankruptcy) in previous months. As a cumulative, England’s local councils have a total of £95 billion of loans outstanding for investment projects.

Many individuals have blamed the policy of austerity, which was introduced in the year 2010 by the Conservative-led coalition, as the reason behind the current economic instability in England’s local councils. This policy saw major shifts in the financial functioning of the council as grants from the central government were cut and local councils were given frequent opportunities to borrow money.

 

Shrinking Budgets, Tighter Restrictions, Withering Dreams 

The councils used these easily accessible loans provided by the Public Works Loan Board and invested them in shopping centers and office blocks with a plan of generating more income in the future. However, ever since the world fell flat after the unexpected and disastrous COVID pandemic, it has been very hard for the councils to generate any revenue from these investments.

In upcoming years, the Woking council is set to vote on a package of cuts which is expected to save about £12 million every year. Amidst these cuts, the town’s residents are upset with local services like bingo, hot tubs, public swimming pools, etc eventually becoming inaccessible to them since most of these will be moved several miles away, in addition to a £20-a-day charge. Furthermore, the council has also decided to close council-owned public toilets, while also permanently stopping funding of the town’s main art gallery and sports pitches, both of which hold incredible importance in the public sector.

As public services that previously seemed safe are being targeted for financial cuts, the current political players are concerned about how this might affect the next round of elections. The economy is going to be a major factor in deciding national leaders for the next term and a hunt for who gets the political blame for this economic crisis is roaring in the England society.

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