Local government reorganisation and devolution is coming to Surrey in 2025

Fiona Davidson, R4GV County Councillor for Guildford South East, has published the following briefing on what is currently known about the plans to restructure Local Government.

1. Purpose of this Briefing

This briefing explains the main features of the new Government’s mandatory reorganisation and devolution plans, and how they will affect Surrey, and particularly Guildford residents. It is designed to be a summary. A Frequently Asked Questions (FAQ) document will also be available shortly, and will be regularly updated as we learn more.

What has happened so far?

• The Leader of Surrey County Council (SCC) has submitted an expression of interest in fast-tracking the move to unitary authorities in Surrey and joining the Devolution Priority Programme.
• If Surrey is accepted onto this programme it is likely – although not yet confirmed – that the May 2025 county council elections will be postponed.
• The Leaders of Surrey’s 11 District and Borough Councils have written to the Government welcoming reorganisation, but requesting that this year’s elections go ahead so that those in charge of planning these changes have a clear democratic mandate.
• We should have the Government’s decision on Surrey’s application, and whether elections will be postponed, at the end of January.
• A Steering Group comprising the Leader of Surrey County Council(Cllr Tim Oliver), the Chief Executive of SCC (Terence Herbert), and the CEOs and Leaders of the District and Borough Councils has been set up to lead the reorganisation and devolution design and planning efforts.
• Surrey Count Council and Surrey’s District and Borough Councils are working collaboratively with  the objective of developing an outline reorganisation plan by March 2025, as required by the Government.
• A number of working groups are also being set up, but there is little information on these so far.

2. Sources of information

Further information is available in the English Devolution White Paper, English Devolution White Paper – GOV.UK published on December 16^th 2024, the source material for this briefing. There are many areas where the White Paper provides little detail. The assumption is that the detail will be worked out over the next year or so – with input from local authorities. Consequently, the current situation is fluid, so the information and interpretation in this briefing may change and accuracy is not guaranteed.

3. Background

Reorganisation and devolution in local government has been underway in England for some time.  In the last 15 years, outside London, unitary authorities and combined authorities – many with Mayors – have been created in areas such as the West Midlands, the West of England, South Yorkshire, Greater Manchester and Liverpool City Region. Although the models are similar, each authority, whether unitary or combined is different, based on history and local choice. Surrey County Council had agreed a Level 2 Devolution deal with the last Government. This would have meant increased local devolution to Surrey on transport, skills, environment, etc., but without a Mayor.

4. What is the new Government trying to achieve?

The objective of this latest reorganisation – known as LGR, Local Government Reorganisation – is to create a ‘sustainable and resilient’ foundation for devolution.  Devolution is the ultimate goal, with directly elected Mayors wielding significantly devolved powers and funding. Devolution is seen as fundamental to unleashing and realising economic potential, and growth. The Government’s view is that local leaders – not Westminster – should decide what their areas need to promote prosperity, well-being, and accountability.

All two-tier authorities (there are currently 21 county councils in England – just like Surrey County Council – which operate alongside district and borough councils) must reorganise into Unitary Authorities. Unitarisation is the precursor to devolution for these authorities. Surrey County Council and borough and district councils such as Guildford Borough Council will disappear. 

New and existing Unitary Authorities which are not already part of a combined authority must reorganise into combinations of Unitary Authorities to be known as Strategic Authorities (SAs). There are 3 levels of strategic authority – Foundation Strategic Authority (FSA), Mayoral Strategic Authority (MSA) or Established Mayoral Authority (ESA). Each level comes with different powers and different funding models. Only the MSA and the ESA will have directly elected Mayors. The powers devolved and funding autonomy increase with each level – the most sophisticated authority is the ESA.

Devolution is also seen as the vehicle for delivering public service reform, and the longer-term intention is to organise and align all public services, such as Health, the Police, Fire Service, etc. with Strategic Authority boundaries.

Existing combined authorities can move straight to one of the new forms of Strategic Authority.

Strategic Authorities will have a very wide range of powers and responsibilities, including:

1. Transport and local infrastructure
2. Skills and employment support
3. Housing and strategic planning
4. Economic development and regeneration
5. Environment and climate change
6. Health, wellbeing and public service reform
7. Public safety

Funding for Strategic Authorities will be simplified but will depend on the level of devolution, with less competition for funding between authorities than exists today. ESAs will receive Integrated Settlements as part of the annual Spending Review, MSAs will receive a consolidated funding pot reflecting their responsibilities, and FSAs will receive local growth allocations based on a formula.

5. Things we know

• The Government is mandating both reorganisation and devolution, and setting very aggressive timetables.
• The current timetable suggests that reorganisation and devolution – although different – are expected to happen in parallel.
• Two-tier authorities can apply for the Devolution Priority Programme. If  accepted, the timetable is below. Note that the Government is ‘minded-to’ postpone the May 2025 elections for authorities on this programme.
• Reorganisation and Devolution Timetable

• Even those authorities who choose not to apply for the priority programme will have to submit detailed reorganisation plans by Autumn 2025.
• The White Paper appears to give primacy on reorganisation and devolution decision-making to upper-tier authorities such as SCC, but emphasises the need for local consensus.
• Unitaries that cannot agree on joining a Strategic Authority within the Government’s timetable will have the SA decision made for them.
• The Government has set criteria for Unitary and strategic Authorities. Unitary Authorities should have around 500,000 residents. Strategic Authorities should have around 1.5m residents. Since the White Paper was published there are rumours that the Government may be more flexible about the population criteria for a unitary than originally proposed. It is said that areas with more than 400,000 or even 300,000 will be considered for a Unitary Authority.

6. What does reorganisation and devolution mean for Guildford?

• Guildford Borough Council and Surrey County Council will disappear.
• Guildford will become part of a Unitary Authority. The current timetable could mean that Guildford Borough Council will be dissolved – alongside Surrey County Council – by May 2027 when the new unitaries are scheduled to go live.
• Surrey County Council has applied for the Devolution Priority Programme. If it is accepted the Government will decide whether the May elections will be postponed. We should have the Government’s decision by January 31^st.
• Surrey County Council is currently working with the 11 Surrey District and Borough Councils to develop an outline reorganisation plan by March 2025. Given different political allegiances – SCC is run by the Conservatives, Borough and District councils are run by Independents or the Liberal Democrats or coalitions of these two groups – co-operation may not be sustained.
• Current thinking is that Surrey will become 2 (east/west) or 3 unitary councils (North/East/West) based on existing Borough and District boundaries.
• A 3 Unitary Authority structure for Surrey (north/west/east) is currently favoured by many political groups.
• Surrey County Council is advocating that the new Unitaries in Surrey should together form a Strategic Authority – within the existing Surrey boundary. Its argument is that even though the county has only 1.2m people, our economic output of more than £50 billion in Gross Value Added (GVA) every year, means that we rank favourably with existing Combined Authority footprints for local economic output.
• Note: the following configurations are illustrative examples only.

3 Unitary Option

 2 Unitary Option

• Unitary Authorities will be responsible for the delivery of services currently provided by SCC and the District and Borough councils.
• Council tax will continue to be collected by Unitary Authorities and there will be a Mayoral precept – if there is a decision to go for a Mayoral Strategic Authority rather than a Foundation Strategic Authority.
• Surrey County Council is advocating that the new Unitaries in Surrey should together form a Strategic Authority – within the existing Surrey boundary. Its argument is that even though the county has only 1.2m people, our economic output of more than £50 billion in Gross Value Added (GVA) every year, means that we rank favourably with existing Combined Authority footprints for local economic output.

7. Things we don’t yet know

• The White Paper stresses the need for stronger community arrangements and to “rewire the relationship between town and parish councils and principal Local Authorities, strengthening engagement and community voice”, but does not suggest how this might happen.
• As Guildford will no longer be a Borough, will a town council be set up, with new parishes in the more rural areas where these do not already exist?
• What powers will town councils and parish councils have?
• How will the size of the town and parish council tax precept be calculated in future?
• How will town and parish councillors be elected? Will they receive allowances like Borough and County Councillors?
• What powers – in addition to having responsibility for the delivery of services – will Unitary Authorities have?
• How many Councillors will sit on a Unitary Authority? How many Councillors will represent Guildford on a Unitary Authority?
• Will Surrey become a Strategic Authority with a Mayor or a Foundation Strategic Authority without a Mayor?
• How will the relationship between the Mayor and the Strategic Authority and Unitary Authorities work?
• Will a Mayor have a Cabinet? Will the Cabinet be appointed from Unitary Authorities?
• … and much more

8. Debt – the elephant in the reorganisation

• Councils in Surrey currently have combined debt of around £5.5bn (tbc). This includes debt of approximately £2bn in Woking, £1.1bn in Spelthorne and £640m in Runnymede. Reigate and Banstead Borough is unusual in having no debt. The Government has said that it will not cancel local authority debt as part of reorganisation and devolution. In his letter to the Minister for Local Government and English Devolution, Jim McMahon, expressing interest in the Devolution Priority Programme, Cllr Tim Oliver wrote, “Any proposals for local government reorganisation will need to adequately consider how to ensure the sustainable operation of any new authority/ies and we will request the government to write off those debts.”
• The level of debt has to be seen in the context of the assets owned by a council and the cost of interest. Woking is believed to have few assets, Spelthorne is said to be in a better position in respect of assets.
• It is believed that – because of the scale of the debt – no other existing or new Unitary Authorities would be willing to join Surrey Unitiaries in a Strategic Authority.
• There is also a concern amongst Councillors that the assets of asset-rich councils will be sold to reduce the combined debts of Surrey councils if there is no bailout from the Government.