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Opinion: It’s the Debt Stupid!

Published on: 13 May, 2025
Updated on: 14 May, 2025

By Joss Bigmore

R4GV borough councillor and former GBC leader

Cllr Joss Bigmore

“Should we have two or three unitaries?” has dominated council debates on the local authority reorganisation – but it shouldn’t.

The elephant in the room is the real issue. What will happen to the £billions of debt owed by Woking, Spethorne and Surrey County Council?

Two proposals were submitted to Westminster last week. The county council has proposed two unitaries and most of the boroughs and districts support three. But both proposals are high-level and based on significant assumptions, and neither yields a definitive answer as to what might work best.

See also: Council Reorganisation – What We Propose ‘Will Not Make a Jot of Difference’ Says Councillor

Critically though, each submission fails to meet the Government’s criteria that any reorganisation must be financially viable from day one. Both proposals assume the Government will address the insolvency of Woking Borough Council alone (currently estimated between £1.5 billion and £2 billion, and the cost of servicing the debt growing by £178 million annually).

The Government has been explicit that: “…there is no proposal for council debt to be addressed centrally or written off… proposals should reflect the extent to which the implications of this can be managed locally”.

See: Devolution – Ministry Asks for Clarification of How £5 billion Debt Will Be Managed

Essentially, reorganisation would transfer SCC’s, Woking’s and Spethorne’s debt issues to Surrey’s reorganised councils, rather than remaining a Westminster issue.

It is crucial for our political leaders to reconsider the worth of this process and weigh the purported benefits of unitarisation against the significant financial impact of managing the stranded debt.

The potential reorganisation is not a grassroots, resident-led initiative; Westminster has set stringent terms and a very risky timeline that Councils are attempting to meet.

Given the Government’s lack of support, we should question whether continuing in this process is prudent, rather than striving to be at the forefront.

…divesting valuable assets to benefit another council is unjustifiable”

Residents of Guildford currently benefit from the second-lowest Council Tax in Surrey, with the council possessing an asset base exceeding £1 billion with only £300 million of debt (of which £200 million is secured against the council’s 5,000+ housing stock).

The council’s revenue streams are among the most robust in the county. It is concerning that Guildford Borough Council’s Liberal Democrat Executive has been driving a proposal likely to result in higher Council Tax for our residents (we are currently 6.3 per cent below Woking, excluding the seemingly annual 5 per cent increase)

I also risks a potential sale of Guildford assets, some of which have been bequeathed by local residents and preserved by generations of councillors and residents, as well as a significant reduction in the quality and breadth of services. All these measures would be to mitigate the disastrous consequences of poor decision-making in other councils for which GBC or Guildford residents should bear no responsibility.

While I am a proponent of unitary councils, they should not come at any cost. I believe Surrey’s local leaders entered this process with good intentions, but if the Government has not met expectations, we must evaluate whether continuing serves our residents’ best interests.

For me, the answer is clear: supporting higher local taxes for lower-quality services and divesting valuable assets to benefit another council is unjustifiable.

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Responses to Opinion: It’s the Debt Stupid!

  1. Alistair Smith Reply

    May 15, 2025 at 11:01 am

    Recently The Telegraph analysed localised council and welfare spending estimates, produced by the Office of National Statistics and the Department of Work and Pensions, as well as regional spending on key services like healthcare and policing, to see how tax and spend impacts different parts of the country.

    Their analysis revealed that 33 of 294 council areas in England pay more in these direct taxes than they take out through localised services. This included Surrey.

    It could be argued that central government has treated Surrey as a ‘Cash Cow’ by extracting more than was wise over the last few years.

    Alistair Smith is chair of The Guildford Society.

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