Surrey County Council publishes 2026/27 budget papers, subject to approval   

Surrey County Council has today published its budget papers for 2026/27, setting out a balanced budget for the year ahead, despite significant financial pressures caused by the impact of the government’s national Fair Funding Review. 

Government funding for the council’s budget is being reduced by over £50m for the next financial year, negatively impacting Surrey more than any other area. 

This, coupled with rising costs and increased demand for some services, means one of the most challenging budgets in the council’s history. 

To help meet this challenge, Surrey County Council is proposing a 4.99% council tax increase, in line with government expectations, to help make up the shortfall and protect essential services. 

There is also the need to deliver significant efficiencies, outlined in the budget report, further focus on prevention activity to help reduce demand, and a reduction in planned capital spend to lower borrowing costs. 

The budget will be considered by Cabinet on Tuesday 27 January 2026, and Full Council on Tuesday 3 February 2026. 

The draft papers were informed by a consultation earlier this year with residents, staff and partners.  

The priority remains to protect the services that matter most to residents – such as support for vulnerable adults, children and families, and the infrastructure that keeps Surrey moving. 

The budget proposes capital investment of £297m for 2026/27, investing in priorities including delivering new SEN units in mainstream schools and expanding school places, refurbishing libraries, opening a new short breaks centre for adults with additional needs, completing the first extra care housing scheme,  an enhanced programme of highways maintenance, flood alleviation and upgrading buildings and fire stations. 

This will be the final budget for Surrey County Council before the transition to two new unitary authorities in April 2027 but the impact of Fair Funding Reform will undoubtedly create a financial context for the new unitary council’s in Surrey that will be very challenging. 

Tim Oliver, Leader of Surrey County Council said: “This is one of the most challenging financial periods we’ve faced, with a drastic decrease in government funding for areas like Surrey alongside rising costs and increasing demand. We are proposing a balanced budget for 2026/27 and remain on track to finish this year in balance as well, which is a remarkable achievement in the current context.  

“The removal of funding from government means that within three years, 92% of local government budget in Surrey will have to come from Council Tax. Even putting Council Tax up by the maximum amount each year – as expected by government – will see no real increase in spending power for Surrey Councils. As costs rise with inflation and demand for services increases, there will be a local government funding black hole in Surrey without driving out further efficiencies. 

“Our focus is to protect the services residents rely on: adult social care, children’s services, support for communities, and the roads that keep Surrey moving, while continuing the strong financial discipline Surrey has shown in recent years and building a stable financial foundation for the new councils in April 2027.  

“I would like to thank everyone who took part in the consultation and all our teams for their continued efforts to deliver efficiencies and manage resources responsibly.” 

Notes 

Government funding is made up of redistributed business rates and government grants 

Surrey County Council’s Core Spending Power, as calculated by the Government, is set to increase for 2026/27 by just 0.6% and 1% by 2028/29 (in cash terms), after an assumed full council tax increase of 4.99%, including the adults social care precept.  Reductions in government funding are resulting in the need to increase local taxation in order to avoid overall reductions in funding.   

Surrey County Council’s funding, based on the multi-year settlement, is projected to fall by £182m. Government figures show a net increase of only £12m between 2025/26 and 2028/29, however it is important to note that this figure assumes the significant reduction in Government funding is offset by £195m of council tax income increases (assuming maximum referendum thresholds are applied). 

Surrey County Council will continue its focus on robust financial management and the delivery of efficiencies to ensure the transfer of a resilient financial position to the new unitary authorities.