Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, with reference to the Surrey County Council paper, "Implementation Programme Update Report, Annex 3 – Draft Illustrative Financial Baseline", of April 2026, what assessment has his department made of whether the estimated West Surrey Council (a) net borrowing of £3.841 billion and (b) gross financing cost of £319.5 million a year, and (c) a gross financing cost as percentage of net revenue budget of 39.9%, is financially sustainable for the new unitary council.

Multi-year allocations for all councils, including those which have been invited to undergo reorganisation, were set out in the final Local Government Finance Settlement. The majority of funding in the Local Government Finance Settlement is unringfenced recognising that local leaders are best placed to identify local priorities. For Surrey County Council, the multi-year Settlement makes available up to £1,275.2 million in Core Spending Power by 2028-29, an increase of 6.9% compared to 2024-25, equivalent to £82.6 million.

The local government reorganisation in Surrey is a critical intervention to improve the financial viability of the area’s councils. 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. In general, as with previous restructures, there is no proposal for council debt to be addressed centrally or written off as part of reorganisation.

The government has committed to unprecedented debt repayment support for Woking Borough Council ahead of their inclusion in the new West Surrey Council, given the significant and exceptional unsupported debt at the council linked to historic capital practices. Further to this unprecedented commitment to repay in-principle an initial £500m of Woking Borough Council’s debt in 2026-27, we are committed to providing interim financial support to the new council until a final decision is made. It is crucial that any debt support must consider value for money for local and national taxpayers.