Ministerial Response - Debt-Sharing and New Unitary Authorities in Western Surrey

Dear Dr Pinkerton, 

Thank you for your letter dated 11 June following the Deputy Prime Minister’s response to oral questions on 9 June. I am writing as Minister with responsibility for Local Government Reorganisation. 

As you will have seen, when I wrote to Surrey Council Leaders on 17 June, I set out the government position in regard to Woking’s debt. Government accepts that, even after rationalisation of Woking’s historic assets, it is likely that the majority of the Council’s remaining debt cannot be managed locally. Government is committed to addressing that unmanageable debt so that any new councils formed out of reorganisation are sustainable in the long-term. 

As previously confirmed, Government will provide an initial tranche of debt repayment support to Woking in 2026/27, ahead of Local Government Reorganisation in Surrey in 2027-28. We intend to provide this in April 2026 and Government will be working with the Council and Commissioners to agree an appropriate amount of debt repayment to be made at that point, taking into account the principles outlined previously including value for money for national and local taxpayers. Government will look to confirm this initial tranche of debt repayment ‘inprinciple’ in September, subject to further certification and the Local Government Finance Settlement, and Government will continue to work with the Council, Commissioners, and Surrey partners after this point to understand what further support is required through 2026/27 and thereafter. I trust that provides the greater clarity that you were seeking. 

Turning to your question of consultation, as you will have seen the government has now launched a statutory consultation on two of the proposals I received for local government reorganisation in Surrey. The two proposals I am consulting upon are from the following Surrey councils: 

• Elmbridge Borough Council, Mole Valley District Council and Surrey County Council, who together proposed two unitary councils; and 

• The Borough Councils of Epsom and Ewell, Guildford, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, Waverley and Woking, and Tandridge District Council, who together proposed three unitary councils. 

The consultation period will ran for seven weeks until Tuesday 5 August and can be accessed at www.gov.uk/government/consultations/local-government-reorganisation-in-surrey. As I set out to the House on 17 June, I would welcome views from any interested person, including residents. The consultation will provide information to help my assessment of the merits of each proposal, and I will carefully consider all the representations I receive, along with all other relevant information available to me. 

Now the consultation has concluded I will decide, subject to parliamentary approval, which, if any, proposals are to be implemented, with or without modification. In taking these decisions I will have regard to all the representations I have received, including those from the consultation, and all other relevant information available to me, and reach a judgement in the round assessing the proposals against the criteria in the invitation. 

Thank you again for writing to me on this important matter.

Yours ever, 

Jim McMahon OBE MP - Minister of State for Local Government and English Devolution