Draft Surrey (Structural Changes) Order 2026

Alison McGovern Excerpts

Wednesday 25th February 2026 General Committees

[The Chair]

Good afternoon, ladies and gentlemen. The usual house rules apply: phones should be switched off, please; there should be no hot drinks in the Committee Room; and if anybody who feels that spring is arriving is bold enough to want to take their jacket off, they may do so.

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

I beg to move,

That the Committee has considered the draft Surrey (Structural Changes) Order 2026.

It is a pleasure, as ever, to serve under your chairship, Sir Roger. The draft order was laid before the House on 14 January and, if approved by this House and the other place, will implement a proposal submitted by Elmbridge borough council, Mole Valley district council and Surrey county council for two new unitary councils—East Surrey council and West Surrey council—on a geography covering the entirety of the county of Surrey.

As I have said in the House before, we need to set local authorities on a clear path to financial sustainability. Local government reorganisation is a vital part of that journey. Having layers of councils is both ineffective and inefficient. Reorganisation is not a bureaucratic exercise or tinkering with lines on a map. With one council in charge in each area, we will see quicker decisions to grow our towns and cities and reconnect people to opportunity. Residents will see more preventive care and will benefit from more financially stable councils, with combined services delivering for a larger population providing efficiencies and better value. That is why reorganisation—with stronger local councils equipped to generate economic growth, improve public services and empower communities—is a vital part of our change.

I thank colleagues in this place and councils across the country for working with the Government on this process. To this end, on 5 February 2025, councils in the 21 areas of England that still have two-tier local government, including Surrey, were invited to submit proposals for unitarisation. Two proposals for reorganisation in Surrey were taken to consultation: one for two unitary councils and one for three. Following the close of the consultation, on 28 October 2025 I announced the Secretary of State’s decision to implement, subject to parliamentary approval, the two-unitaries proposal.

In reaching that decision, we considered the proposals carefully against the criteria set out in the invitation letter, alongside the responses to the consultation, all representations and all other relevant information. In our judgment, although both proposals met the criteria, the proposal for two unitaries better met the criteria in the case of Surrey. In particular, we believed that it performed better against the second criterion, as it is more likely to be financially sustainable. Putting Surrey’s local authorities on a more sustainable footing is vital to safeguarding the services residents rely on, as well as to investing in their futures.

If Parliament approves the draft order, there will be two unitary councils for Surrey from 1 April 2027. To deliver the new unitary councils, the order requires elections to be held in May 2026 for the new East Surrey and West Surrey councils, which will assume their full powers on 1 April 2027. These elections will replace the scheduled county council and some district council elections. The elections will be on the basis of East Surrey having 36 two-member wards and West Surrey having 45 two-member wards. Subsequent elections to the unitary councils will be in 2031 and every four years thereafter. We expect the Local Government Boundary Commission for England to review the wards in time for the 2031 elections. Implementing this proposal and establishing these new unitary authorities will help deliver our vision of having stronger local councils in charge of all local services and controlling local economic powers, to improve local public services and help grow economies.

Before I outline the content of the draft order, I want to bring attention to related issues in Surrey: the level of unsupported debt in Woking, and devolution for Surrey. The Government recognise that Woking borough council holds significant and exceptional unsupported debt that cannot be managed locally in its entirety. We have committed to unprecedented debt repayment support of £500 million for Woking council, reflecting historical capital practices at the council and the value for money case for acting to protect local and national taxpayers. This is a first tranche of support, and we will continue to explore what further debt support is required at a later point, including following greater certainty on the rationalisation of assets in Woking. Any support will need to consider what further action can be taken locally to reduce debt and ensure value for money for the national and local taxpayer. We are committed to providing the new unitary with interim financial support, such as capitalisation support, until this process is complete.

On devolution for Surrey, there is a plan that we are taking forward. On 12 February, we set out our intention to deliver a new wave of foundation strategic authorities across England as the next step forward in the Government’s devolution agenda. In Surrey, the Government are working with partners, which will include the new unitary authorities, to establish a foundation strategic authority for the area. This will ensure that relevant functions held at the county level, such as transport and adult skills, can continue to be delivered on that geographic footprint where possible.

We have also proposed that a spatial development strategy should be produced for the Surrey geography, which would be a function held by the foundation strategic authority. The establishment of a strategic authority will be subject to the relevant statutory tests being met, and to local consent. The Government will also ensure that fire and rescue functions continue to be governed on the same geography.

We prepared the draft order having considered the information in the proposals and the representations invited from all the councils concerned on specific matters. The order provides that, on 1 April 2027, the county of Surrey and the districts of Elmbridge, Epsom and Ewell, Guildford, Mole Valley, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, Tandridge, Waverley and Woking will be abolished. The councils of those districts and county will be wound up and dissolved. In their place, the functions will be transferred to the two new unitary authorities, East Surrey council and West Surrey council.

The draft order also covers electoral matters, which I have set out, and provides for appropriate transitional arrangements. On transitional arrangements, it places a duty on the existing councils to co-operate with each other, the shadow authorities and the shadow executives, and to create joint committees for East Surrey and West Surrey, which will be dissolved after the first meeting of their respective shadow authorities.

[Mr Andrew Snowden (Fylde) (Con)]

The Minister referenced £500 million of debt repayment support off the back of Woking’s unsupported debt. That rings a bell with me; my neighbouring authority in Blackpool has £500 million of debt, while my Fylde borough council carries no debt. How much do the Government think they will pay in debt support as they look at the other councils going through this process, and have they budgeted an amount for that? Will the debt be paid off before the new authority is created, or will it be transferred to it?

[Alison McGovern]

I thank the hon. Gentleman for his question, which is very important. Dealing with the significant debt that local authorities have built up for a range of reasons is extremely important. He will be aware that we have dealt with the special educational needs and disabilities issue in recent days. He raises his point in the context of reorganisation, and those decisions will be taken on a case-by-case basis. It is very important that we get this issue right, and I look forward to discussing with him the details of the case he mentioned on many occasions, I am sure, as we move forward with Lancashire reorganisation.

I am pleased that Surrey leaders, members and officers have already commenced and implemented on a voluntary basis some of the transitional arrangements in the draft order to support delivery of the two new unitary councils. As such, the required joint committees have been set up and the implementation team agreed, and work is under way on the required implementation plan.

I would like to take this opportunity to thank all the Surrey councils and everyone involved in this process for their continued hard work and collaboration for local government reorganisation in Surrey. I know that this is not easy, and I reiterate my commitment to continue to support councils through the process. As part of that, we have confirmed £63 million in new funding for all 21 areas going through reorganisation, including Surrey, to help make the change.

In conclusion, through the draft order we are seeking to replace the existing local government structures in Surrey with two new unitary councils that will be financially sustainable and able to deliver high-quality public services to residents. I commend the draft order to the Committee.

--- Later in debate ---

[Alison McGovern]

I thank all Members who have contributed to this debate, and I also thank the Members, particularly those from Surrey, who have engaged with me on this subject in recent months—I really appreciate their time and effort. I will try my best to respond to the points that have been made but, as the hon. Member for Guildford rightly expressed, I may need to write to her and others with more detail, particularly where they have requested specific guidance or advice that has been given previously; I think it is easier for members of the Committee if I provide that to her directly.

I will turn to some of the questions asked by the hon. Member for Ruislip, Northwood and Pinner. He mentioned devolution, and I answered his question in my opening speech when I said that the next step is a foundation strategic authority. Today we are dealing with reorganisation, and the Government believe that it is right to ensure the firm foundations of the unitary authorities before we proceed, but we are determined none the less to move forward with devolution for England.

The hon. Gentleman also asked about the SEND deficit; I was interested in the specific figures he mentioned, as I do not believe that any firm numbers have been confirmed yet. I am in daily contact with DFE Ministers and others, so I am sure we can correspond on that matter.

[Anna Dixon (Shipley) (Lab)]

Will the Minister take a brief intervention?

[Alison McGovern]

I can, if my hon. Friend really wants to intervene. [Laughter.]

[Anna Dixon]

No—I withdraw.

[Alison McGovern]

I will happily correspond with any Members interested in that subject, but nothing has been confirmed yet. Let us try to make progress on that; it is very important for all local authorities.

The hon. Member for Ruislip, Northwood and Pinner asked whether this will be the sole reorganisation, and the answer is no. We are making progress on the next waves of reorganisation, and there will be more for the Government to say on that very shortly. He also asked for guidance on the new high-value council tax surcharge that we have introduced, as well as the £63 million extra in capability funding. We have been in consultation and collaboration with councils and the Local Government Association on both those matters, as we have been throughout all of reorganisation. I will happily provide the hon. Gentleman with more detail on that, if he wishes.

The hon. Member for Guildford asked about precedents from other reorganisations. Of course, we take into account what has happened previously, and the criteria against which decisions are judged are set out in the invitation letter. She asked about the county council leadership, and I can write to her with details of that process, if she would like. She also asked some detailed questions on risks and the technicalities of vacancies and by-elections, and I will again write to her with the precise details.

The hon. Member for Broxbourne asked about the name and our fellow Member’s campaign. Following oral questions, I will engage with the Member concerned, so he need have no fear—we will be listening to his points.

Finally, the hon. Member for Woking asked about the situation that he rightly described as incredibly serious—it is much more serious for any council to have got into that position than the attention that it is often given would suggest. I will write to him on the next steps with the commissioners, how it affects the whole best value process and the background of that. He also asked about the specifics of cancelling elections last year. I do not think that has any relevance, but I will write to him to confirm that, as I think he asked a specific point about advice.

I say to Surrey Members, through the Committee, that there are significant financial challenges here, and I do not underestimate how important it is to get this right to ensure that services can continue to be delivered for residents. I look forward to working together with Surrey Members to get those decisions right, so that we all get this process to the best place it can be.

The Government’s ambition is to simplify local government by ending the two-tier system and establishing new single-tier unitary councils. It is a once-in-a-generation reform to make stronger local councils that are empowered across local services and equipped to get economic growth going, improve services and empower communities. The draft order provides for two new unitary councils in Surrey, and it will help ensure that local government is financially sustainable and able to deliver for residents. These are the benefits that the draft order can bestow on the people and businesses of Surrey, and I therefore commend it to the Committee.

[The Chair]

Before I put the Question, I have been discussing with m’learned friend, the Clerk, the situation that arises. The Minister has, as ever, entirely courteously and properly indicated that she will respond in writing to some of the questions that have been asked, and it is not my place to interfere with the process at all. However, while the draft order relates to Surrey, it is clear that there are potentially wider implications that might be of interest. I gently suggest that, if she chose, at the very least, to copy the two Opposition Front Benchers into her letters, that would probably be hugely appreciated.

--- Later in debate ---

[Alison McGovern]

As you might expect, Sir Roger, I entirely agree with your suggestion, and I would be very happy to do so.

[The Chair]

As ever, courteous—thank you very much indeed.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Surrey (Structural Changes) Order 2026.