Woking ‘cosplayed’ at being bank, councillor says

PARAPHRASED_TITLE: Woking Council Accused of ‘Cosplaying’ as Bank in School Loan Deal
CATEGORY: Finance
PARAPHRARED_CONTENT: A prominent councillor has stated that Woking Borough Council acted as if it were a bank, “cosplaying” this role, when it extended multi-million-pound loans to a private educational institution.

Greenfield School received a loan of £13.3 million from the council, which has since declared bankruptcy. The school has recently informed the council that it currently lacks the necessary funds to completely settle a £2.4 million debt that is scheduled to become due on November 25.

The Local Democracy Reporting Service reported that the loan was granted to the fee-paying school, which charges annual fees of up to £17,000 for students in year five, even though Woking possessed “no statutory duties relating to education.”

The school had stated its requirement for the funds to establish new classroom facilities. At the time, the council contended that this initiative would simultaneously alleviate pressure on the state education system by freeing up capacity and function as an investment.

While a significant portion of the total debt is structured for repayment over five decades, a separate, smaller carry-over loan amounting to £2.4 million is now due.

The school indicated that it is approximately £1.5 million short of the required amount and will be unable to make the payment for a minimum of two additional years.

During a meeting held on Thursday, Councillor Dale Roberts, who serves as the cabinet member for finance, stated: “It’s the view of this administration that the former administration had no business in entering into this arrangement. For any number of reasons.”

He elaborated, noting that the borough council, first and foremost, lacked any statutory responsibilities pertaining to education, a point underscored in a financial history report compiled by auditors Grant Thornton.

He further explained: “Secondly, again according to the Grant Thornton report, the arrangement was partly to generate income. It was a commercial loan.”

He continued: “This council was not a bank. The act of lending did not make this council a bank.”

He concluded by stating: “A bank has processes, system controls, expertise, regulatory responsibilities, compliance functions, commercial capabilities. This council had none of those. It was cosplaying being a bank.”

The executive body decided to reorganize the loan agreement. They declined an alternative proposal to seize control of the school’s assets, citing the council’s objective to decrease its overall asset holdings.

Following the meeting, the council informed the BBC that it had no additional comments to provide.