Surrey County Council Needs to Make £150m Savings Over 5 Years

Published on: 31 Mar, 2022
Updated on: 2 Apr, 2022

By Julie Armstrong

local democracy reporter

Surrey County Council needs to find ways to save £150 million in the next five years.

Its financial strategy shows it needs to close a gap of £150.5 million by 2026/27 – mainly because of growing demand for services and inflation, but also due to increased borrowing costs and an expected reduction in government funding.

The authority has already delivered about £240 million efficiencies since 2018, when its finance director resigned at short notice.

In contrast to those days, it is finishing the 2021/22 financial year with a small £0.6 million surplus, meaning for three years in a row now it has managed to balance its budget without relying on reserves, said external auditors Grant Thornton.

They said the council should be commended for this, but as it is “not yet a long-term trend it needs to remain cautious”.

The auditors made a positive assessment of value for money at the county council in a report on the authority’s 2020/2021 accounts, which went to its audit and governance committee this week.

The report found the council had put in place proper arrangements to secure efficiency.

Two areas of significant weakness flagged were the 2018 inadequate Ofsted rating of children’s services and the need to transform pensions administration – both of which already had action plans in place, said the council’s chief accountant Barry Stratful.

The latest Ofsted inspection published earlier this month said an improved children’s services no longer needed external intervention.

The auditor noted a significant backlog in pensions admin, saying the operations of the system had been “sub-optimal for several years”, and the council had agreed to clear this backlog before the end of 2022/23.

Overloaded staff have now ended contracts with external customers London boroughs and Surrey Fire and Rescue Service.

Ciaran McLaughlin, of Grant Thornton, said: “It’s very pleasing to be able to report that there was nothing that we found which management was not already aware of and dealing with and that’s a real positive.

“On financial sustainability and on improving economy efficiency and effectiveness we found no significant weaknesses which is really positive.

“And in terms of governance, the two significant weaknesses, which were reported, were ones that the council was already aware of and working hard to address – children’s services and pensions administration.”

Cllr Victor Lewanski (Con, Reigate) said: “My only concern is, looking at the financial statement, the ability to achieve £40 million worth of savings every year going forward.

“I think every year as you try and make more and more savings it gets harder and harder.”

Mark Hak-Sanders, Surrey council’s strategic finance business partner (corporate), said: “We would tend to agree with you that it does become increasingly difficult to identify efficiencies… but there are plans in place to address that issue.”

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