'Grave concerns' for new West Surrey after county's most indebted councils all lumped together

Surrey is home to some of the country’s most indebted councils, with bankrupt Woking leading the way at about £2.6 billion in the red.

Others have serious financial issues that also need close attention as both Spelthorne and Runnymede have recently been warned by the Government over their own monetary situations.

Surrey County Council itself has huge debts, albeit with significantly larger revenues.

The Local Government Reorganisation announcement has once again focused attention on the area’s financial plight – because the most indebted councils have been put together into what will become West Surrey.

It has led to fears the new council will be dead in the water before it has even got going.

The problem has existed since the plan to split dissolve Surrey and its 11 boroughs and districts into two mega councils was first mooted.

Comments to the Government’s reorganisation consultation included many from residents concerned about the responsibility for debt being shared with authorities that were not in severe financial difficulty.

In an effort to offset this the Government has said it would repay in-principle £500m of Woking Borough Council’s debt in 2026-27 in what it calls a “significant and unprecedented commitment given historic capital practices at the council”.

It has also said this would be the first tranche of repayment support, and that it would continue to explore what further debt support is required at a later point.

What has not been made clear, is how the finances of all the legacy councils will be shared and the Ministry has yet to respond to questions on how it plans to deal with the issue.

Surrey’s Liberal Democrat MPs said that while they welcomed the clarity the £500m write off allowed but still had ‘grave concerns’ over the future of West Surrey.

In a joint statement, they said: “We are determined to work together across Surrey to ensure that this delivers for all local residents.

However, we continue to have grave concerns over West Surrey’s financial sustainability.

“At the moment, it could be bankrupt from day one.

“We will continue to press the Government to ensure that this council won’t start on the back foot.

“Fortunately, the Government has acknowledged this position after endless lobbying and are writing off £500 million of this debt”

Will Forster, Member of Parliament for Woking, said the historic financial relief wouldn’t write off all of the borough council’s debt but that it was “certainly a step in the right direction.” and would push for more.

He added: “The Government have conceded that there will be a need for more support in the future.”

Cllr Ann-Marie Barker, Leader of Woking Borough Council, said the bailout marked a significant step towards addressing our debt position and follows the government’s decision to move forward with the creation of two new unitary councils in Surrey.

She added: “Today’s announcement provides a degree of certainty as we continue to work closely with government and commissioners to secure a sustainable financial future for Woking and ensure the best possible outcomes for residents.

“We recognise that Woking’s debt is an ongoing concern not only for our own community but for residents across Surrey.

“With government support in place and a clear strategy for asset disposal, we remain focused on delivering our Improvement and Recovery Plan and entering the new unitary council in the strongest possible position.”