Government selects two-unitary proposal for Surrey reorganisation

The decision – which marks the first of its kind in the Government's current local government reorganisation programme – will split the county into 'East Surrey Council' and 'West Surrey Council', subject to Parliamentary approval.

In a letter to the leaders of the county's councils, Secretary of State Steve Reed also confirmed that the Government is committed to a repayment in-principle of £500m of Woking Borough Council's debt in 2026-27.

"This is a significant and unprecedented commitment given historic capital practices at the council," Reed wrote.

"It reflects our acknowledgement that, even after the rationalisation of Woking's historic assets, there is significant unsupported debt held by the council that cannot be managed locally."

East Surrey Council is set to cover Elmbridge, Epsom and Ewell, Mole Valley, Reigate and Banstead, and Tandridge.

While West Surrey Council will take in Guildford, Runnymede, Spelthorne, Surrey Heath, Waverley, and Woking.

Reed chose the two-unitary approach over a second proposal that suggested creating three unitary authorities: 'East Surrey', 'North Surrey', and 'West Surrey'.

The Secretary of State said the two-unitary proposal "better meets the criteria" set out by the Government.

"In particular, I believe it performs better against the second criterion: whether the councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks. My view is that the two unitary proposal is more likely to be financially sustainable.

"As you will appreciate, this criterion is particularly relevant in the unique context of Surrey, where reorganisation is a critical intervention to improve the financial viability of the area's councils."

The Government will now seek a Structural Changes Order, which will be subject to Parliamentary approval, that will abolish existing councils, establish new structures and make transitional arrangements.

Elections for the new councils will then take place in May 2026, with the new authorities formally taking over responsibilities from 1 April 2027.

On the transitional arrangements, Reed said: "It is important that reorganisation is a shared endeavour", adding: "The draft Order provides a role for all the councils in Surrey in the Joint Committees and Implementation Team.

"To maximise the time available for implementation, given our shared desire for new councils to go live on 1 April 2027, I encourage you to establish Joint Committees and the Implementation Team on a voluntary basis as soon as possible."

Eight Surrey district and borough councils voiced disappointed with the announcement.

Hannah Dalton, Leader of Epsom & Ewell Borough Council and Chair of the Surrey Leaders Group representing eight borough and district councils, said: "We are extremely disappointed by the government's decision to proceed with two unitary authorities, effectively creating two 'mega councils' that risk losing local identity and responsiveness to our community's values.”

She argued it will effectively create two "mega councils" that "risk losing local identity and responsiveness to our community's values".

Cllr Dalton added: "This decision goes against the three unitary model put forward by our councils, which we believe offered a more balanced and representative solution for Surrey.

"Despite our concerns, we are determined to play an active role in shaping the two new councils that will replace the existing local government structure in Surrey."

Simon Edwards, Chief Executive of the County Councils Network, meanwhile said: "Today's decision to proceed with the creation of two unitary councils in Surrey is the right decision.

"Importantly, we strongly welcome the Government sticking to its own statutory guidance, creating two new councils with populations in excess of 500,000.

"The County Councils Network's (CCN) research has clearly shown this is only way to deliver significant efficiency savings, maintain financial resilience and minimise disruption to care services, while creating a sustainable platform for driving economic and housing growth.

"Looking ahead, today's decision must therefore be a marker in the sand for other areas. Failure to keep to their original guidance and criteria will lead to serious questions over whether there has been a robust evaluation of proposals."

The District Councils' Network, meanwhile, said the Government's approval of large new councils risks undermining community representation in Surrey.

The Chair of the District Councils' Network, Cllr Richard Wright, said: "The new councils should commit to ensuring that local government remains genuinely local, with each community empowered.

"We believe that the best way to ensure the views of all communities are reflected and for new councils to build on the strengths of district services, would be for each existing council to be given equal representation on the joint committees taking reorganisation forwards.

"It's disappointing that this isn't happening but we urge all parties to work together in an inclusive and open manner."         

Tim Oliver, Leader of Surrey County Council, welcomed the decision, adding: "As expected, there will be elections to the new unitary councils in May 2026. We will also continue to work with Government on the ambition to establish a strategic authority for the area.

"All councils can now come together to push forward the right structures, and put the right resources in place, to enhance our already vibrant county."

Adam Carey