Local Government Finances: Surrey

Gregory Stafford Excerpts

Thursday 22nd January 2026 Commons Chamber

[Dr Spencer]

I thank the hon. Gentleman for his intervention. He is exactly right: through local government reform, all areas could be affected by the debt and other commitments of neighbouring authorities.

That brings me to the point I was about to make, which is that it really is not fair that my constituents in Runnymede could have to pay for the failed decisions of Woking politicians—both those in power and those who failed in their duty to scrutinise decisions—because those constituents never got to vote for them. The scale of the remaining debt, when combined with the debt of other local authorities, means that the new west Surrey unitary will be bankrupt from day one. New local authorities should be established on a sound and equal footing, so that the provision of services can be determined by local need. The Government need urgently to introduce a sound long-term financial plan for both unitaries in Surrey.

[Gregory Stafford (Farnham and Bordon) (Con)]

I thank my hon. Friend for his impassioned and powerful speech on this matter, with which I wholeheartedly agree. I think he is being somewhat polite in the way he describes what this unitary authority is going to be. Essentially, if it is saddled with the debt from Woking and a number of other boroughs, it will essentially be stillborn from the start, and residents in my areas of Farnham, Haslemere and the other Surrey villages that I represent will be worse off because of it. Does he not agree that the Government must write off that legacy debt, or at the very least ring- fence it, so that our constituents do not face the problems —to be frank, the absolute mess—left by other boroughs and their politicians?

[Dr Spencer]

My hon. Friend is a lot harder in his language on this issue and I very much respect him for that. At the very least, we need to have a well thought-out plan and strategy for what is going to happen with the block of debt. There is a variety of different options for how it can be managed and dealt with. Here is the fundamental problem that my constituents—service providers, charities and businesses—raise with me and are really worried about: that decisions made in a neighbouring local authority, which they have had no involvement in or dealings with, will have a material impact on them when the west Surrey unitary authority is set up.

I realise that the scale of the debt is a huge and complicated problem. I do not envy the Minister in trying to find a way through. I am glad that we have this forum for debate this afternoon, but we need to have these debates and discussions so that the west Surrey unitary authority—and, frankly, others that are being set up that face similar problems—can be dealt with fairly and so we know what is coming down the tracks. My residents are not going to be punished for decisions made in other authorities that they never had the chance to vote for. That is fundamentally unfair.

By the way, in some ways this is not something that we are unused to in my part of Surrey. We sit on the penumbra—just on the outskirts—outside London, and there are plenty of policies that come from this awful Mayor of London that affect us in a whole range of negative ways and which we do not have the ability to vote for. Unfortunately, this situation is far and away the most substantial we have faced, and there is so much fear, concern and uncertainty about what may be coming down the track.

Of course there is a huge irony in all this, because Surrey is one of the largest contributors to the Exchequer in our country. Cutting local authority funding, and impacting services and the many contracts that local authorities maintain, risks serious harm, not only locally in Surrey but to the national economy. Let us consider some examples.

If the Government do not effectively fund local highways, that will lead to deteriorating road conditions, resulting in more temporary emergency repair works. We all know the nightmare that that causes, with delays, costs of millions in lost work hours and missed appointments, and longer transit times for goods. That damages the Surrey economy and, by virtue, the national economy. If the Government do not effectively fund adult social care, that will cause bed blocking in hospitals and pressure on health services, impeding effective recovery and care.

If the Government do not effectively fund planning services, that leads to lengthy delays in assessing applications for homes and businesses and, crucially, risks enabling rogue development, which blights Surrey and other areas. Although planning enforcement remains a discretionary service, there is a real risk that it is increasingly seen as a “nice to have” and not an essential tool to protect communities. Evidence shows that enforcement rates continue to fall in the face of funding pressures. Inappropriate and illegal development—people essentially cocking a snoot at the planning system, and building anyway—is a serious problem in my constituency and in places across the country, and my residents are rightly incensed. Critical to stopping this activity and turning the situation around are not only stronger enforcement powers—for which I have been campaigning for years—but, at the very least, the resources to do proper planning enforcement.

--- Later in debate ---

[Miatta Fahnbulleh]

We are simplifying and consolidating 36 revenue funding streams worth over £56 billion over three years, which we hope will provide greater flexibility, stability and certainty for local authorities.

We recognise that funding reform is just one part of the story. That is why we are committed to simplifying local government by ending the two-tier system and establishing new single-tier unitary authorities. I think the end goal that Members across the House are trying to get to is consistent. There is common ground: we want authorities that are sustainable and strong and can deliver for constituents. The Secretary of State has decided, subject to parliamentary approval, that Surrey will move towards two unitary councils: east Surrey and west Surrey.

The question of debt was raised, and rightly so. We are very alive to the pressure facing the new unitaries because of the historical debt. As the hon. Member for Runnymede and Weybridge says, we have announced an unprecedented commitment to repay, in principle, £500 million of Woking borough council’s debt in 2026-27. That is the first tranche of support, and we will continue to explore what further debt support is required and how we can work with the new west Surrey authority to resolve the debt issue. We are clear that residents are at the heart of this, and it is our collective responsibility to ensure that we are delivering for them. We are committed to working together to make sure that they are protected and have the quality and level of services that they deserve.

[Gregory Stafford]

From what the Minister says, it sounds as if she accepts that the remaining debt is still unsustainable to be dealt with at a local level. Is she teasing us with a future announcement of further moneys, or is it more of a general ambition?

[Miatta Fahnbulleh]

I would do no such thing as tease with announcements that sit with the Chancellor. What we have said to partners on the ground in the local authority is that this is a shared problem and we are committed to working together to find a resolution. We understand the pressure that the historical debt will place on the new authorities. It is incumbent on all of us to find a way through that ensures that, on the other side of it, we have local authorities that are sustainable, can survive and can deliver the quality of services for the local residents that is required.

--- Later in debate ---

[Miatta Fahnbulleh]

I am happy to take that point away, and either my Department or the DFE will write back and provide an answer to the hon. Gentleman.

Let me address the question about devolution and the devolution process, and the move towards a mayor. We are absolutely committed to devolution. I have spoken to the leader of Surrey council and made it clear that we want to move forward. For us, the first step is creating a strong strategic authority that is empowered to start driving economic change and can bring constituent authorities together for strategic decision making. We want to move forward with that at pace, so we will work with the new unitaries, and with partners on the ground, to build a strong economic footprint, and build the institution that allows us to move to the next stage of devolution.

[Gregory Stafford]

The Minister is being extraordinarily generous with her time, but I do not want her to miss the opportunity to respond to the important question raised by my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) about a Surrey mayor. Will she confirm whether we will get a mayor in Surrey before the end of this parliamentary term?

[Miatta Fahnbulleh]

Ultimately, that will be a local question. The process is always to put in place a combined authority first and foremost, and to get that working. The big lesson that I have learned from my many years working in the space of devolution—a lesson that we see when we look across the Greater Manchester combined authority—is that if we first get strong institution working in partnership, so that the combined authority can hold power and deliver economic development functions, it makes the mayor far stronger and more effective.

The first stage for us is working with the constituent authorities to move forward with the strategic authority. We want to do that at pace, and to ensure that we are equipping it with the powers that it needs, so that it can start driving economic prosperity for the area, take on strategic planning powers and transport powers, and start investing in the local community. We can then move through the stages of devolution. The commitment to devolution in Surrey is absolutely there, and we will work with partners to deliver that.

I thank all hon. Members for the powerful points that they have raised, and for their passion, commitment and advocacy for Surrey. I hope that they have heard, in this debate, that the Government are absolutely committed to fixing the foundations of local government finance, against an incredibly difficult backdrop. We are ready to listen to the concerns of any local authority about the ongoing reforms. We know that they are difficult and punchy, but we are making the reforms because we think that they are necessary if we are to get local government back on a sustainable footing. We are determined to work together, across party lines, to deliver our shared goal of services that work for constituents in every part of this country. The Government are absolutely committed to that.

Question put and agreed to.

5.10 pm

House adjourned.