Surrey County Council has approved a balanced budget for 2026/27 in one of the most challenging financial contexts in recent years.
A reduction of over £50 million in Government funding next year, alongside inflationary costs and rising demand for essential services, has required difficult decisions to ensure the Council continues to deliver for residents. The outcome of the Government’s Fair Funding Reform, together with substantial increases in the cost of maintaining current service provision and increased demand, means pressures are rising at a significantly higher rate than forecast funding.
To close the gap and protect key services, the budget includes a 4.99% increase in Council Tax (including the adult social care precept, in line with Government expectations), a programme of efficiency savings, a continued focus on prevention to reduce future demand, and rephasing of some capital investment to lower borrowing costs.
The increase in the total bill for a Band D property will equate to £1.77 per week.
Decisions to increase Council Tax are not made lightly and balance the need to provide sustainable services for the most vulnerable with a recognition of the pressures on household finance, particularly during times of high cost of living.
The Council’s priority remains to protect the services residents rely on, particularly adult social care, children’s services, support for communities, and the roads that keep Surrey moving.
The approved capital programme for 2026/27 totals £297 million, prioritising delivery of new SEND units in mainstream schools and expanded school places, refurbished libraries, a new short breaks centre for adults with additional needs, completion of the first extra care housing scheme, an enhanced programme of highways maintenance and flood alleviation, and upgrades to buildings and fire stations.
This will be the final budget before the transition to two new unitary authorities in April 2027. National funding changes will continue to shape the financial environment that the new councils inherit.
Tim Oliver, Leader of Surrey County Council, said: “We take our duty to the people of Surrey extremely seriously. Residents fund our services through their Council Tax and have every right to expect us to manage those resources responsibly.
“Full Council has agreed a balanced and responsible budget for 2026/27 in the most challenging circumstances. It keeps essential services running, protects the most vulnerable and provides stability through a year of transition so that no one is left behind. We have built a budget that funds the real cost of delivery in Adults, Children’s and SEND, where demand and complexity continue to rise. The outcome of Fair Funding Review and inflation means pressures are increasing faster than forecast funding. Within three years, around 92% of Surrey’s local government budget will need to come from Council Tax. Even the maximum increases do not deliver a real terms rise in spending power, so continued efficiencies are essential.
“We do not take decisions on Council Tax lightly. Through our consultation, many people told us they were concerned about the impact on household budgets but also recognised the importance of protecting vital frontline services.
“Our approach is clear: protect people facing services, maintain financial resilience and invest to save through prevention and early intervention.”
Notes to Editors
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 provisional 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.
The average Band D Council Tax per year is £1,938.42*, here’s how your money is spent:
- Adults, Wellbeing & Health Partnerships: £813.54
- Children, Families & Lifelong Learning: £502.55
- Place: £263.07
- Community Protection & Emergencies: £79.16
- Resources: £168.99
- Central Income & Expenditure: £111.11
*For illustrative purposes, this represents the total budget split by the Surrey County Council portion of Band D Council Tax value. Some areas are funded by specific restricted grants, which are not reflected here.
Please note: figures refer to the Surrey County Council element of Council Tax and exclude other precepts (e.g. Police and District/Borough).
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