Borough has taken initial steps to stabilise financial position but still faces “very significant challenges”: Commissioners

In their first report to the Ministry of Housing, Communities and Local Government, the commissioners found the conduct of council meetings was “particularly poor” and said: “The council continues to face a range of very significant challenges in terms of its financial and commercial positions, leadership, culture, governance, continuous improvement and in its housing and regeneration functions.”

They said the debt largely accumulated through acquisitions of office properties near Heathrow “to generate additional income to support the delivery of discretionary services”.

These though had lost significant value, on average by 45%, and a surplus originally budgeted at £10m a year now stood at only £4m.

“This is before charging an appropriate minimum revenue provision (MRP) which is being implemented in 2025/26 which will mean the properties will be making significant losses, causing a negative impact on the council’s revenue budget position,” the report found.

Amid a long list of inadequacies, the commissioners noted “significant weaknesses in the quality of reporting to members, in the council’s governance and assurance and in its management of capital projects”.

These were exacerbated by capacity now being absorbed by preparations for local government reorganisation, in which Spelthorne is due to become part of the new West Surrey Council in April 2027.

Spelthorne’s debt had stood at £1bn in March 2025 but has been restructured down to £715m by taking advantage of discounts available in exchange for shortening the term of loans, and significantly higher interest rates than those prevailing when the original borrowing occurred.

While some officers and councillors had responded positively to the commissioners, among others there was “a lack of understanding…about the purpose of the intervention and a lack of acceptance about the necessity of financial steps the council needs to take.

“Some have stated publicly that they believe the intervention has been politically motivated.”

There was significant mismatch between member objectives, the work plans of officers and the views of officers about what is achievable by the council.

“Members view officers as unresponsive, and officers view members as inconsistent and in some cases hostile; each sees the other as the architects of the council’s problems,” the report said.

Turning to governance, the commissioners said: “The conduct of council meetings is particularly poor. Member behaviour in the chamber is disrespectful to the chair, to other members and to officers. This significantly impedes proper and effective decision-making.”

There were also “significant weaknesses in the quality of reports produced for members”, while performance monitoring data was “superficial” and budget monitoring data “untimely, unclear, inaccurate”.

Local government minister Alison McGovern welcomed the improvements found and said: “These steps are critical to improving the council’s financial sustainability ahead of Surrey’s local government reorganisation in April 2027.”

Spelthorne’s leader Cllr Joanne Sexton said: “The report rightly recognises the significant steps the council has already taken, particularly in stabilising our financial position.

“The publication of our Improvement and Recovery Plan, the agreement of an MRP policy and the successful completion of debt restructuring represents an important milestone and demonstrates our commitment to taking difficult but necessary decisions in the best interests of our residents.”

Cllr Sexton said further improvement was required and the momentum must be maintained as the council enters reorganisation.

She added: “I remain confident that, working constructively with the commissioners, members, officers and our partners, this council can continue to build on the progress already made and deliver the improvements our communities rightly expect from us."

Mark Smulian