Local Government Reorganisation: South-east

Zöe Franklin Excerpts

Tuesday 10th March 2026 Westminster Hall

[Zöe Franklin (Guildford) (LD)]

It is a pleasure to serve under your chairmanship, Mr Vickers. I am exceptionally grateful to my hon. Friend the Member for Surrey Heath (Dr Pinkerton) for securing the debate and outlining so eloquently his concerns and those of his residents. I thank all colleagues who have spoken; it has been helpful to weave together the different perspectives of those of us who are going through reorganisation and those who are experts in the field. I hope the Minister will take on board everything that has been said in the debate.

Like my hon. Friend, I support the principle of local Government reorganisation. I am sure we have all spoken to residents who are surprised and frustrated to learn that they have to deal with one council to fix potholes and a different one to get their bins collected. Simplification for that purpose is actually a good thing but, as we have heard from west Surrey colleagues such as my hon. Friends the Members for Woking (Mr Forster) and for Surrey Heath—it is a recurring theme in Surrey and for pretty much all councils in the south-east—reorganisation is frankly just about finance.

Colleagues have clearly and starkly illustrated that Surrey is in billions of pounds of debt racked up by Conservative-led councils, and it has been Liberal Democrat colleagues in local government who have led the way in turning councils’ finances around. That said, I am grateful to the hon. Members for Crawley (Peter Lamb) and for Strangford (Jim Shannon), who both rightly noted that savings are not always guaranteed. It is going to be “interesting” to see how things evolve and whether the savings presented to us will actually come to fruition.

Reshaping local government can make sense, but reorganisation succeeds only when it is done with communities, not to them. Across Surrey, residents, councillors and officers feel that the pace of the reorganisation process has left them struggling to keep up with decisions that will help to reshape local services. When we debated the draft Surrey (Structural Changes) Order 2026 two weeks ago, I raised concerns about the speed of the process and the lack of meaningful consultation. I highlighted the fact that when residents were asked, they said they wanted three authorities. The financial figures show that the difference between the cost savings for two versus three authorities across Surrey is relatively minimal.

When it comes to ensuring that a local authority reflects its residents, it is important that it gives them the sense of place that the right hon. Member for East Hampshire (Damian Hinds) referred to, which is really important to residents. The structural changes order came into force today; unfortunately, I have not yet had answers to my questions in the debate on it, but I am grateful to the Minister for confirming that I will have them shortly.

Members have articulated the serious financial pressures facing Surrey. Residents are understandably worried about historical debt, and how the cost of living crisis alongside that will affect them, whether that is through council tax harmonisation, the loss of valued community assets, or pressures on frontline services. Residents did not make the decisions that created the problems, yet they will be asked to shoulder the financial consequences.

I would welcome clarity from the Minister on what transitional funding and support the Government are going to provide for west Surrey and other authorities that are going through reorganisation. They are going to start their lives as new authorities on a potentially unstable financial footing. As colleagues have highlighted, west Surrey is looking at an unstable footing in the order of around £4 billion.

There is a wider question about the economic framework shaping the future of the authorities in question. The current proposals will give west Surrey strategic responsibilities that are similar to those of a mayoral authority, but without access to the equivalent long-term investment. Mayoral authorities benefit from 30-year investment funds, because the Government recognise that long-term certainty unlocks growth. If west Surrey and other new combined authority areas are expected to deliver the same strategic ambitions as a mayoral authority without the same tools, the Government need to explain how they expect those authorities to unlock the growth needed for them to economically succeed and serve their residents.

I would be grateful if the Minister could clarify two points regarding foundation strategic authority status. First, will the Minister give clarity on the pathway to a mayoral authority specifically for Surrey, and on the timing of any future mayoral election? Secondly, will she outline how the Government are going to ensure that areas that are undergoing reorganisation via the foundation authority route do not miss out on the growth funding available to mayoral combined authorities elsewhere?

On communication and governance, large-scale structural change depends on strong collaboration among county councils, district councils, officers, community organisations and Members of Parliament, yet many colleagues across Surrey, including me and my team, have struggled to obtain clear and timely engagement with Surrey county council. A particular example—I could give a litany of them—is my work alongside Guildford borough council, South Western Railway and Network Rail on progressing discussions about a potential new railway station in Guildford. We are struggling to get engagement from the county council, which is also the transport authority. This does not bode well for the wider essential communication needed to make the transition to new councils work. I would welcome the Minister’s thoughts on that.

My final Surrey-specific point relates to the parish councils and voluntary sector organisations across the county, which are also significantly impacted by local government reorganisation and deserve urgent clarity. These bodies provide vital hyper-local leadership. They support vulnerable residents, deliver local services and act as a crucial bridge between communities and the higher tiers of government. Many of them are, frankly, unsure what the new governance structures mean for their funding, commissioning arrangements and day-to-day interactions with the new authorities. Surely such crucial partners need clarity.

A specific concern that highlights the problem was expressed to me this week on behalf of parish councils. The parish council elections are due in 2027, but they will no longer align with the main-tier elections, so parishes will incur additional costs. Currently, those unexpected costs will have to be footed by parishes, so will the Minister outline what support they will be given for the unexpected electoral cost when elections do not align?

To move beyond Surrey, local government across England is under immense pressure after years of financial strain, rising demand in social care and SEND, and inadequate long-term funding. Reorganisation alone cannot resolve the structural challenges; it is part of the solution, and we desperately need it to work, but it is only part of the solution. We Liberal Democrats continue to argue that alongside reorganisation we need fair funding, proper recognition of the costs faced by rural and semi-rural areas, and sustainable, multi-year settlements that allow councils to plan ahead. That is why we focus so much on needing a cross-party solution to the social care crisis. Many county councils face having to spend enormous percentages of their budgets on social care, leaving wider budgets stretched to breaking point, despite their herculean efforts.

In conclusion, communities across Surrey, the wider south-east and England deserve local government reorganisation that strengthens them, not uncertainty that undermines them. We have heard from colleagues throughout the House about their grave concerns as experienced Members of Parliament and experienced individuals with backstories in local government, and about the concerns their residents have raised with them. I hope the Minister will reflect on the issues raised in the debate, take the steps needed to deliver, and work with colleagues across the House to deliver local government reorganisation that works for local people.

--- Later in debate ---

[Alison McGovern]

I accept the right hon. Gentleman’s point about reorganisation costs; I will think about whether I can say more to him in writing about that—otherwise we will just go over this forever.

I now turn to the really important point made by the hon. Member for Woking. I probably cannot respond in this context to his specific question about honours, but I will take it away. I have immense sympathy with the points he raised, but I am conscious that investigations are ongoing. I will leave it there, but he was correct to make his case.

The removal of the Audit Commission—and what happened to local audit under the Government from 2010 to 2015—was in my view an absolute disaster. We will put it right with the reintroduction of local audit and much greater constraints on the sort of behaviours we have seen not only in Woking, but elsewhere. I will leave that there, too, but I could go on about it for hours.

I turn to Hampshire, Portsmouth, Southampton and the Isle of Wight. The Government have received a number of proposals and representations from councils. Across those areas, different authorities have put forward different visions for the future, some favouring multiple new unitary authorities while others, such as the Isle of Wight, have been clear in their preference to remain stand-alone. Those views, alongside the evidence submitted by other councils and stakeholders, will be assessed carefully against the criteria of sustainability, geography and public engagement.

I turn briefly to Sussex. Proposals for reorganisation have been received and the consultation has now closed. The Government are considering all the evidence submitted and will take decisions guided by the statutory criteria and what will best support effective and sustainable local government.

I turn to Oxfordshire. The Government have now launched a statutory consultation on proposals for unitary reform across the country, which closes this month. A range of options have been proposed, including a single county-wide authority, a two-unitary model and a three-unitary configuration, including a Greater Oxford council.

At this point, I note the remarks made by the hon. Member for Bicester and Woodstock (Calum Miller). He will appreciate that I cannot comment on the specifics, but he asked for a meeting on finance with me and my hon. Friend the Member for Banbury (Sean Woodcock), which I am very happy to arrange. Oxford is a vital cog in helping to grow our national economy, but that is exactly why the consultation and the process are so important. Decisions must be informed not only by structural and economic arguments made by local councils but by the views of residents, businesses and communities themselves.

Across all areas undergoing reform, the Government’s priority is that change must not come at the expense of vital decisions to keep building homes and delivering frontline services. We are also providing practical support to councils delivering reorganisation to help with this capacity, including up to £63 million nationally to help manage implementation pressures alongside expert advice from across the sector and the Local Government Association. I note the comments made by the hon. Member for Guildford (Zöe Franklin) about parish councils being responsible for their own services and so on. If she has particular concerns about that, I will welcome a note from her.

Reorganisation also sits alongside wider action to place local government on a stronger financial footing. Earlier this year, the Government confirmed the first multi-year local government finance settlement in a decade, which has been welcomed by Members from across the House because it provides councils with greater certainty and ensures that funding better reflects needs and deprivations.

We should remember that the benefits of strong unitary councils are not theoretical. For example, where they already exist, we are seeing results. In South Yorkshire, four unitary councils working with the mayor are helping places such as Barnsley and Doncaster not only to grow their local economies but to translate that into higher wages for local people. South Yorkshire is one of the places that has suffered worst with unemployment in our country’s history, but it is now making serious and significant progress. That is the real economic growth that improves living standards.

Newer unitary councils such as those in Buckinghamshire and North Yorkshire are delivering millions of pounds of efficiencies through streamlined structures that have reduced duplications, delivering savings that will be reinvested in frontline priorities such as supporting vulnerable children and funding local transport. The hon. Member for Woking made his point about vulnerable children very well; I will alert the Minister with responsibility for children’s care to his comments so that he can get a response.

[Zöe Franklin]

I want to return to the Minister’s point about how mayoral authorities are making such economic progress, and to my question. When foundation authorities are formed on the journey to reorganisation, they do not get the same funding support as a mayoral authority. They are therefore losing out on essential kick-starting resources to help them on their journeys to successful economic growth. Will she clarify what support is coming?

[Alison McGovern]

When my own area in Merseyside started off on the journey to get a mayor, it was really unclear how to build the right resources; the time it took to do that should not be underestimated. The Association of Greater Manchester Authorities started 20 years before the city had a mayor.

The right way is to get the foundation strong first: get the unitary authorities in place and then move forward from there. I know that the hon. Lady will have more conversations with my hon. Friend the Devolution Minister, who will talk to her about the specific process for Surrey. It is important to me, as Minister for Local Government, to get the foundations strong so that we can build devolution up in that way.

I recognise that Members have raised a number of specific concerns about the implications of reform in their own areas, and those concerns matter. They are being carefully considered. Whether the issue is financial sustainability, which we have discussed, local identity, which I went on about again, or the impact of potential boundary changes, decisions will be taken carefully, transparently and in the interests of residents.

Although they are out of scope of our reorganisation programme, town and parish councils will continue to play an important role in representing their communities. New unitary authorities will also be expected to develop strong, local, area-based working, so that decision making remains close to the communities that it affects. As we look ahead, the next steps are clear: the Government will move forward with decisions and continue working with councils across the region to ensure that change is delivered smoothly and responsibly.

In conclusion, local government reorganisation offers an opportunity for the south-east: an opportunity to give local areas the capacity to grow, build the homes their communities need and see better public services; an opportunity to replace complex and outdated structures with councils that are simpler, stronger and more accountable; and an opportunity to ensure that local government is fit for the future.

I thank the hon. Member for Surrey Heath again for securing this debate. I look forward to continuing to work with Members across the House and with local partners to make changes that will benefit communities right across the south-east.