New council faces 'very challenging' finances - report

The new West Surrey Council "will operate in a very challenging financial environment, with significant budgetary pressures and limited financial resources", new papers show.

A report presented to the shadow authority's cabinet shows the new authority will face a £4.92m annual shortfall in their accounts, reported by the six constituent councils it will replace from 1 April.

Early Q1 figures suggest overspends of between £3.97m and £536,000 from four of the councils will need to be balanced.

The long-term picture presents further challenges with the six boroughs adding about £4bn in debt on to West Surrey's balance sheet, according to the Local Democracy Reporting Service.

The papers say: "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."

West Surrey Council will also inherit its share of Surrey County Council's reported £12.19m shortfall, which will be split with East Surrey Council.

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

Both new councils are being formed as part of ongoing local government reforms which will see the current two-tier council structure in Surrey replaced by the two unitary authorities.

"West Surrey will operate in a very challenging financial environment, with significant budgetary pressures and limited financial resources from vesting day [the day the council takes over], coupled with increasing demand and costs of services, and reducing government funding," the report said.

It added that decisions being made would "need to consider the ongoing financial impact and ensure that expenditure does not exceed the resources available".

West Surrey Council leader Paul Follows said the figures needed to be "taken with a pinch of salt but need to be monitored", adding that the report was "an indication" rather than the council's financial position.

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