Letter: How Are the Massive Outstanding Council Debts To Be Paid?

Published on: 6 Sep, 2026
Updated on: 5 Sep, 2026

From Bernard Quoroll

former local authority CEO

In response to: Government Pays Itself £500 Million to Reduce Woking’s Debt But £2 Billion Shortfall Remains

So the Government is fulfilling its promise to pay £500 million of Woking’s debt. Now let’s add what is not being said.

£500 million sounds like a large number but, for the Government, some would say it amounts to little more than an internal book keeping transaction. It is dwarfed by the remaining debt burden which we are all going to inherit, and which is real money, remembering also that East Surrey Council does not have the same problem.

Woking (and some others) have wasted many billions and is now embarked on a fire sale of what it has left in a weak market. Without more the new West Surrey Council will be for practical purposes bankrupt from birth and will have to continue the fire sale but this time of all the assets in its portfolio, ie the assets of the constituent councils. And again, all in a weak market.

It’s not just the assets themselves of course but the loss of opportunity which those assets represent. When the market returns, others will take the profit and West Surrey will have lost the opportunity to use them for public benefit, ie to put them to work to create future income streams and to promote its plans to further the local economy. No one is talking about those losses because they are hard to quantify, but on any basis, they are astronomical.

Now let’s join the dots. Vesting day, the day the new West Surrey council takes over, is 1st April 2027. The council tax needs to be declared in good time before then. The shadow council is ominously quiet about the financial future. The new management team is not yet properly up and running and the focus is on just getting the doors open for business. But one can make a few educated guesses about what is in store for us.

Firstly, we will have to pay the new council tax for ongoing services which will include an element for inflation and some costs of amalgamation to which the Government have made a modest up front contribution. It will be massaged down but it will have a decades long tail and we will probably never know whether it has saved any money in the end. The more it is massaged, the more it will cost later.

We have yet to hear how the remaining mountain of unpaid debt is going to be handled. Perhaps it will be massaged in some way similar to the accounting measure used for the Woking tranche. But it is still real money and will not go away. Some mechanism may be adopted to kick it down the road a bit but the longer it takes to repay, the more it will cost,

Waiting in wings will be the “mansion tax”, expected to be payable on properties valued at over £2 million. It will be collected with the council tax but transferred directly to central funds. It will feel like council tax but there will be little direct benefit and in my view will generate feelings akin to the poll tax for some people.

There is a remote possibility that the new council will be allowed to retain it for a while to help offset debt but that will not make much of a dent in the debt or make anyone feel much better and what Governments offer today is writ on water.

Even if you don’t have to pay the mansion tax it is hard to see how the numbers are going to be kept manageable. Quite a lot of people on fixed incomes are likely to find that a significantly higher proportion of their state pension is passported straight back to the local authority – and not just people living in high rate band properties.

And all this because the government of the day wanted to move the deckchairs around without a vote or a proper plan and without much thought for the consequences.