Local Government Finances Surrey 2026-01-22

Opened the debate

The amount of money that local government authorities have, such as Surrey county council and the new east Surrey and west Surrey unitary councils, has a huge day-to-day impact on residents. It determines the provision of services and the protection of our communities, and it is essential to the many businesses and voluntary organisations in the area through both policy and the many direct contacts held with local service providers. We heard again this week claims that the Government are boosting funding for councils, but the reality does not live up to the rhetoric. Surrey county council’s budget is being reduced by over £50 million for the next financial year. Surrey is negatively impacted more than any other area despite increased demand and escalating costs just to maintain existing service levels. The Government’s calculations simply do not provide enough money for statutory services such as adult social care provision—and we all know about the urgent action that is needed to improve the special educational needs system and support available for children, schools and families. Instead of investing in services, the Government are slashing central grant funding for Surrey. Despite that, Surrey county council has managed to put forward a balanced budget, thanks to hard work led by Councillor David Lewis, but the situation as it stands is unsustainable, and the risks are mounting. The Government need to act.

Government Response

The Minister for Local Government acknowledges the concerns raised regarding local government finances in Surrey. The Government have provided £500 million in debt relief to Woking Borough Council, which is set to be further reduced by future support mechanisms and financial strategies. The Department of Levelling Up, Housing & Communities is working closely with councils across the country to ensure a smooth transition towards new unitary authorities while maintaining essential services for residents. In addition, the Government have announced plans to increase funding for adult social care and special educational needs, recognising the urgent need for these provisions. The Minister emphasises that local government reform aims to create more efficient, accountable governance structures that better serve their communities. She calls on all parties to work together towards a sustainable future for Surrey's local authorities. The Minister acknowledges the tough context inherited by local authorities. She outlines significant funding reforms and reorganisation plans to enable local councils to deliver services effectively. For Surrey, the multi-year settlement period in 2028-29 will make available almost £1.5 billion of core spending power—an increase of 7.3% compared with 2024-25. The Minister highlights an unprecedented commitment to repay £500 million of Woking borough council’s debt in 2026-27, and commits to working together to ensure local authorities are sustainable and deliver quality services for residents. She addresses questions on the timing of debt resolution and states that the Government understands the pressure historical debt places on new authorities and is committed to finding a resolution. We have provided £500 million to Woking local authority, acknowledging the historical work with it and committing to continue working on resolving this issue. The Minister emphasised that addressing such issues requires all parties involved to collaborate effectively. She highlighted significant reforms in children’s social care with a historic £2.4 billion investment over the multi-year settlement period through the Families First partnership programmes. Additionally, she mentioned an additional £4.6 billion of funding available for adult social care in 2028-29 compared with 2025-26. She also promised to write back regarding the specific point raised by Dr Pinkerton about Frimley Oak Academy. The Minister confirmed the commitment to devolution, outlining the process of creating a strong strategic authority before moving towards mayoral leadership. This involves empowering a combined authority first to hold power and deliver economic development functions, making the mayor more effective later on. She concluded by thanking all hon. Members for their powerful points and reiterating the Government's commitment to fixing local government finance while working together across party lines.