Surrey County Council Faces Biggest Increase in Debt in the UK

Published on: 27 Aug, 2025
Updated on: 27 Aug, 2025

By Emily Dalton

local democracy reporter

Surrey County Council has recorded one of the steepest rises in debt in the country, new figures show. Three of its boroughs, which Guildford may soon be grouped with, also rank among the most indebted local authorities in the UK.

A report published this morning by BBC Shared Data Unit has revealed Surrey County Council’s borrowing has surged by nearly 48 per cent in the past year, climbing from £726.9 million in 2023/24 to £1.1 billion in 2024/25.

At the borough level, Woking council continues to hold the title of the UK’s most indebted council per person, with £20,601 of debt per resident – more than double that of the next authority, Spelthorne, with £10,252. Runnymede also features in the top ten with £6,608.79 of debt per head.

Woking and Runnymede are expected to form part of the same unitary authority as Guildford under the Government’s reorganisation of local government. Spelthorne might also be in the same authority depending on whether a two or three authority option is chosen for Surrey.

Councils are allowed to borrow money to fund schools, housing and infrastructure projects as well as to invest in commercial ventures. But experts have warned the rising reliance on short-term loans risks storing up problems.

Jonathan Carr-West. Photo Charlie Burgio

Jonathan Carr-West, Chief Executive of the Local Government Information Unit (LGIU), described the spiralling borrowing levels as “extremely worrying”. He said: “It’s not a sustainable system. As one finance officer put it to me, it’s essentially payday loans for local governments.”

With soaring debt levels and higher borrowing costs, debt repayments eat up a bigger chunk of council budgets, meaning less money for services. Even though residents may be paying more council tax, they will still be getting less bang for their buck.

Local authorities across Surrey and the county have sold off assets to generate more income and help balance the budget. Mr Carr-West added: “We’re now seeing the selling off of assets and once they’re gone, they’re gone. So that was public value that is now passing into private hands and that won’t come back now.”

Tim Oliver – leader of Surrey County Council

Surrey County Council leader Tim Oliver said pressures on services and higher costs were driving the increase. He said: “All our key services – including social care, children’s services, and highways maintenance – are facing higher demand, higher costs, and reduced funding.”

He added: “There is more to do to set a balanced budget next year – but also transform the way we work and find new ways to deliver services more effectively.”

The BBC’s analysis found councils across the UK added £7.8 billion in debt in the past year, with a growing proportion of borrowing used to plug day-to-day budget gaps rather than fund long-term projects. More than 30 councils have already sought exceptional financial support from the government adding up to £1.3 billion.

A Ministry of Housing, Communities and Local Government (MHCLG) spokesperson said: “While councils are responsible for managing their own budgets, we know that the current funding system is broken, which is why we are taking decisive action so local leaders can deliver the public services their communities rely on.

“We have announced over £3.4 billion of new grant funding for local services on top of the £69 billion already made available this year to boost council finances, and we will go further to reform the funding system, including at new unitary councils, to ensure it is fit for the future.”

Neither Woking nor Spelthorne borough council provided a statement on the record about the study by the BBC Shared Data Unit. Instead both local authorities referred to reports on its improvement and recovery plan.