Woking Borough Council

The government has permitted the council to fund day-to-day revenue spending by selling assets or borrowing against them.

Why it matters: Capitalisation directions are a last resort before a Section 114 notice. They signal the council cannot meet its legal obligation to balance its revenue budget from normal income.

Issued by: Granted by MHCLG following a formal application from the council.

A formal declaration by the council's Section 151 officer that the authority cannot balance its budget.

Why it matters: Section 114 of the Local Government Finance Act 1988 requires councils to stop all non-essential spending immediately. It is the local government equivalent of insolvency.

Issued by: Issued internally by the council's statutory finance officer; monitored by MHCLG.

External auditors could not obtain enough evidence to form an opinion on the council's accounts.

Why it matters: A disclaimer is the most serious audit outcome. It means the accounts are so incomplete, or access to records so restricted, that the auditor cannot say whether the figures are reliable.

Issued by: Public Sector Audit Appointments (PSAA) / appointed auditor.

The government has formally notified the council that it may not be meeting its Best Value duty.

Why it matters: Councils have a statutory duty under the Local Government Act 1999 to make arrangements to secure continuous improvement. A best value notice is a precursor to a full inspection.

Issued by: MHCLG.