Residents and local MPs are raising alarms over how billions of pounds of council debt will be handled as Surrey moves towards local government reorganisation. With new unitary authorities set to be created in 2027 – 28, questions remain over which areas will shoulder the financial burden – and whether residents could be unfairly hit with debts they played no part in creating.

Dr Al Pinkerton, MP for Surrey Heath, has been vocal about the risks. He welcomed the Government’s latest clarification but warned it does not go far enough.

“I welcome the Government finally setting out more detail on how it plans to handle Woking’s vast debts — debts built up over years of reckless Conservative mismanagement,” he said. “But let’s be clear: this does nothing to address the true scale of the crisis. Surrey Heath residents played no part in creating Woking’s mess — nor did those in Spelthorne, Runnymede, Guildford, or Waverley.”

He added that pressing ahead with reorganisation without tackling the debt was “unforgivable”. “For Labour in Westminster, hand-in-glove with the Conservatives at Surrey County Council, to press ahead with unitary reorganisation without first tackling this debt mountain is unforgivable. And the people of Surrey Heath will remember exactly who saddled them with it.”

Dr Pinkerton had written to Deputy Prime Minister Angela Rayner expressing concern that Surrey Heath could inherit debt from neighbouring councils. He asked for clarity on government support and guidance for future debt-sharing arrangements, highlighting that there was currently no plan to address or write off the debt centrally.

The Government has since responded. Jim McMahon MP, Minister for Local Government, confirmed that while rationalisation of Woking’s assets may help, “the majority of the Council’s remaining debt cannot be managed locally.” He added that the Government is committed to ensuring that any new councils formed are sustainable.

“As previously confirmed, Government will provide an initial tranche of debt repayment support to Woking in 2026/27, ahead of Local Government Reorganisation in Surrey in 2027 – 28,” McMahon said. “We intend to provide this in April 2026 and will work with the Council and Commissioners to agree an appropriate amount, taking into account value for money for national and local taxpayers.”

McMahon also outlined the next steps in deciding which unitary proposals will go ahead after the public consultation period ended on August 5.

“I will decide, subject to parliamentary approval, which, if any, proposals are to be implemented, with or without modification. In taking these decisions I will have regard to all the representations I have received, including those from the consultation.”

The debt issue has been a flashpoint in the debate over local government reorganisation. Critics warn that without careful management, newly formed councils could start life financially constrained.

Residents and MPs alike are calling for assurances that financial responsibility will be fairly allocated and that essential services will not be compromised. As Surrey moves closer to major council restructuring, there are fears that the financial future of communities like Surrey Heath hangs in the balance.