Local Government Reorganisation

Tuesday 28th October 2025 Written Statements

[The Minister for Local Government and Homelessness (Alison McGovern)]

The Government’s ambition is to simplify local government by ending the two-tier system and establishing new single-tier unitary councils. This is a once-in-a-generation reform, and our vision is clear: stronger local councils empowered across local services, equipped to drive economic growth, improve local public services, and empower their communities.

Strong local government will help grow the economy and drive up living standards—the Government’s No. 1 mission. With one council in charge in each area, we will see quicker decisions to grow our towns and cities, and connect people to opportunity. Reorganisation will speed up house building, get vital infrastructure projects moving, and attract new investment, with more people able to buy their own homes and access high-quality local jobs. It will also help reform local public services. Bringing services like housing, public health, and social care under one roof means that one council can see the full picture and spot problems early—for example, supporting a family in need of housing, and then supporting the children to stay in school. Ensuring public services are effective and responsive to their communities will help to improve the health and wellbeing of individuals and communities, and enable people to reach their full potential.

To this end, on 5 February, councils in the 21 areas of England that still have two-tier local government and neighbouring small unitary authorities were invited to submit proposals for unitarisation. Surrey councils were invited to submit their proposals by 9 May, on an accelerated timetable, due to the unique financial context of the area. Today, the Secretary of State has written to the leaders of Surrey councils about those proposals, and I can update the House on those decisions.

I would first like to thank all councils in Surrey for their hard work and commitment. Their dedication and collaboration has been vital for ensuring that quality proposals for new local authority structures, with the interests of residents at their heart, were brought forward.

Two proposals for unitary local government in Surrey were considered: one from Elmbridge borough council, Mole Valley district council and Surrey county council, for two unitary councils; and one from the borough councils of Epsom and Ewell, Guildford, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, Waverley, Woking, and Tandridge district council, for three unitary councils. As the House was informed on 17 June, these proposals were taken to consultation, which closed on 5 August. A summary of the responses to that consultation will be published today.

We have now considered the proposals carefully against the criteria set out in the invitation letter of 5 February, alongside the responses to the consultation, all representations and all other relevant information to assess the proposals. In summary, these criteria are: whether the proposal achieves for the whole of the area concerned the establishment of a single tier of local government; whether the councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks; whether the unitary structures prioritise the delivery of high-quality and sustainable public services to citizens; whether councils in the area have sought to work together to come to a view that meets local needs and is informed by local views; whether new unitary structures support devolution arrangements; and whether new unitary structures enable stronger community engagement and deliver genuine opportunity for neighbourhood empowerment.

The Secretary of State has decided to implement the “two unitaries” proposal for Surrey, subject to parliamentary approval. In our judgement, although both proposals met the criteria, the proposal for two unitaries better meets the criteria in the case of Surrey. In particular, we believe it performs better against the second criterion, as it is more likely to be financially sustainable. This criterion is particularly relevant in the unique context of Surrey, where reorganisation is a critical intervention to improve the financial viability of the area’s councils, given unprecedented levels of unsupported debt. Putting Surrey’s local authorities on a more sustainable footing is vital to safeguarding the services its residents rely on, as well as investing in their futures. We will bring to the House, for approval, a structural changes order to implement the proposal for two new unitary councils, East Surrey council and West Surrey council.

I would also like to confirm at this time our commitment to repaying, in principle, £500 million of Woking borough council’s debt in 2026-27. This is a significant and unprecedented commitment, given historic capital practices at the council. It reflects our acknowledgement that, even after the rationalisation of Woking’s historical assets, there is significant unsupported debt held by the council that cannot be managed locally.

The figure of in-principle support we are announcing today is subject to further assurance of the council’s financial position, progress with asset rationalisation, and the local government finance settlement. This is a first tranche of repayment support, and we will continue to explore what further debt support is required at a later point. Any support must take into account value for money for the local and national taxpayer and the council’s continued commitment to reducing debt as far as possible within its local capacity.

Simplifying local government also ensures a strong foundation for devolution. We are committed to working with partners across Surrey, including new unitary authorities once established, to establish a strategic authority for the area in order to ensure that relevant functions held at the county level can continue to be delivered on that geographic footprint where possible, such as transport and adult skills. The establishment of a strategic authority will be subject to the relevant statutory tests being met and local consent. We will also ensure that fire and rescue functions continue to be governed on the same geography.

For the other 20 areas going through local government reorganisation, I would like to emphasise that the decision to implement the proposal for two unitary councils in Surrey does not set any precedent. Decisions will be taken individually, based on the merits of each proposal we receive and the local context.

I will deposit in the House Library copies of the documents I have referred to, which are also being published on gov.uk today.

[HCWS998]