West Surrey’s Daunting Financial Position Laid Bare – Still a Legacy Debt of £3.5bn

Published on: 12 Nov, 2026
Updated on: 12 Nov, 2026

By Chris Caulfield

local democracy reporter

West Surrey “will operate in a very challenging financial environment, with significant budgetary pressures and limited financial resources” after its constituent councils reported a £4.92 million annual shortfall in their accounts.

The new authority is set to take over services from six boroughs on April 1 and early Q1 figures suggest huge overspends in Spelthorne £3.97 million, Guildford £1.06 million, Runnymede £0.79 million, and Surrey Heath £0.54 million, will need to be balanced.

It will also inherit its share from the county council with the upper tier reporting a £12.19 million shortfall  – although this is against a budget of more than five times the combined boroughs and will be split with East Surrey Council.

Council staff say the biggest drivers to this are from its children’s, families and lifelong learning service at £8.4 million and adult social care at £3 million.

The long-term picture presents further challenges with the six-legacy boroughs lumping significant debt onto West Surrey’s balance sheet.

Combined, Woking, Spelthorne, Runnymede, Surrey Heath, Guildford and Waverley are £3.98 billion in debt having borrowed more than £4 billion in a series of  investment and regeneration projects that brought mixed returns.

Legacy debt

“The borrowing position is significantly influenced by Woking’s debt of £2.19 billion, which is subject to government support, Spelthorne £719 million debt, and Runnymede £587 million debt”, papers presented to West Surrey’s shadow council read. These add up to nearly £3.5 million.

In all it leaves the councils forking out about £18.07 million this quarter in interest repayments  -and only taking in about £2.8 million in investment income, with the largest returns reported by Waverley £0.9 million and Guildford £0.67 million.

Surrey County Council has borrowed about £1.87 billion and is forecast to pay £45.1 million this year in interest – partially offset by £23.5 million in returns.

The report read: “The Quarter 1 monitoring position highlights a number of emerging financial pressures across the sovereign councils.

“The most significant relate to demand-led services, income shortfalls, inflationary pressures, treasury volatility and the continuing implementation of Local Government Reorganisation.

“West Surrey will operate in a very challenging financial environment, with significant budgetary pressures and limited financial resources from Vesting Day, coupled with increasing demand and costs of services, and reducing government funding.

“West Surrey Council will be increasingly reliant on council tax as the primary source of income and decisions made by the sovereign councils in West Surrey and the West Surrey Shadow Authority will need to consider the ongoing financial impact and ensure that expenditure does not exceed the resources available.

“It is vital that significant importance is placed on effective financial management and medium-term financial sustainability to deliver a balanced budget going forwards and protect service delivery.”

Officers told the meeting: “These are forecasts based on positions at the time it was calculated but I would expect the position to come out more favourable.

“That’s generally the trend.”

Cllr Paul Follows

The Leader of the Shadow Council, Paul Follows (Lib Dem, Godalming South, Milford & Witley), added that Q1 figures “need to be taken with a pinch of salt but needs to be monitored.”

He said: “If we were at Q2 the year after that is probably the first set of numbers that I’m going to go ‘that is legitimately West Surrey’s position’.

“I think everything here is an indication, it’s information, I don’t think it’s going to be everything we might need.”

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