Major Question Marks Remain Against Surrey Heath’s Accounts

Published on: 8 Feb, 2026
Updated on: 9 Feb, 2026

By Chris Caulfield

local democracy reporter

Lingering concerns over Surrey Heath’s rental income continues to leave huge question marks over the council’s finances, said auditors struggling to make heads or tails of the beleaguered boroughs’ books.

The council has not had its accounts formally signed off since 2019 amid growing debt and falling revenues.

Expensive regeneration projects, while being primarily to improve town centre futures, have had limited returns on the investments, while cash flows remain unclear with auditors still unable to accurately say where the council’s money is coming from – or going.

Surrey Heath is one of five boroughs and districts that border Guildford.

It has left Surrey Heath Borough Council facing the possibility of having to pass on its “mess” to the newly formed West Surrey Council when the authority takes over as part of local government reorganisation.

Cash being collected by managing agents is not being passed to the council regularly, with some transferred and some retained by agents. Auditors believe this is to meet on-going costs linked to Surrey Heath’s investment property portfolio.

The situation, however, is considered a vast improvement on years gone by, as accountants are finally beginning to wade through the council’s financial labyrinth – and are hopeful of releasing signed off audited accounts in the near future.

Surrey Heath Borough Council office (Image Google)

Examples of the challenges they face include £5.3 million in rental cash brought in from The Square in Camberley in 2024/25. Of that £2.6 million was transferred to the council with £2.7 million retained by managing agent Praxis to settle expenditure – but the council has not been not monitoring commercial property income or regularly reconciling what it has been billed, or how much has been collected.

Papers presented to the Tuesday, February 3 audit, standards and risk committee, read: “The council has a number of commercial properties for which it bills and receives rents either monthly or quarterly. In addition, the council charges tenants for service charges.

“The property portfolio is managed by managing agents who undertake billing and cash collection on the council’s behalf.

“At the time of concluding our audit work, we have been unable to gain clarity on the council’s arrangements regarding accounting for tenant arrears at year-end, rents received in advance, service charges, and accounting for cash held by managing agents, including timing and recognition of when funds are transferred to the council.”

Grant Thornton auditors said: “Our concern was there wasn’t a clear auditing trail that the council could rely on to prepare its accounts.

“We would expect that there was a clear trail to show what the gross income is and was and a clear record being provided to the council.

“Council still has a responsibility to ensure that where it is incurring expenditure it is still appropriately reasonable and represents value for money. It remains a key area to improve.”

There is likely to be movement on the balance sheets going forward as well – although this will be more due to accounting practices.

Flagship projects such as the Square will again be considered as regeneration, designed to deliver key services, rather than investment – where the council would expect to make a profit.

Cllr Robert Lee

However due to the sheer amount of work auditors at Surrey Heath face, they will still be accounted for based on their book value as the council has been unable to get up-to-date valuations of its properties.

Councillor Robert Lee (Lib Dem, Parkside) said: “Its absolutely critical that that we know where the finances are at given we are going though (local government reorganisation).

“We can’t hand over a mess to a subsequent authority.”