The People, Performance and Development Committee of Surrey County Council met on Friday 10 July 2026 to discuss the ongoing local government reorganisation (LGR) and its impact on staff, as well as to review the annual workforce report and settlement agreement costs. The meeting provided an update on the disaggregation process for Surrey County Council staff, detailed the findings of the annual workforce report, and noted a reduction in settlement agreement costs.

Staffing and Local Government Reorganisation (LGR)

A significant portion of the meeting was dedicated to a verbal update on staffing in relation to the ongoing local government reorganisation (LGR). Shelley Smith, Director of People and Change, explained the complex process of workforce disaggregation for Surrey County Council staff, which will end on 31 March 2027. All employees need to be allocated to one of the new organisations, with the majority transferring to one of the two new unitary councils. This process involves one-to-one meetings between staff and line managers, with training provided to managers to ensure they are equipped for these discussions. Staff will be informed of their initial allocation decision, with a formal confirmation and a right of appeal to follow. Appeals can only be made on limited grounds, such as a protected characteristic impacting their ability to move to a specific new organisation, inaccurate information being used for the decision, or not having a one-to-one meeting.

Councillor Paul Follows, Liberal Democrats Group Leader and Leader of the Official Opposition, raised concerns about minimising uncertainty for staff and questioned the timeline for informing employees of their allocation. He highlighted that while district and borough staff have more certainty due to aggregation, Surrey County Council staff face uncertainty due to disaggregation. Shelley Smith acknowledged these concerns, stating that while a specific timeline hasn't been set, they hope decisions will be confirmed later on in the year at the latest. She also noted that while there is no minimum consultation period under TUPE¹ regulations, prolonged uncertainty increases the risk of staff turnover and lower morale.

The discussion also touched upon the broader implications of LGR, with councillors expressing scepticism about the feasibility of completing transition and transformation within ten months, as suggested by some commissioners at the LGA conference. Concerns were raised about the lack of capital for transformation and the potential for new authorities to face financial difficulties.

The role of trade unions in the LGR process was also discussed. Shelley Smith confirmed that extensive work has been done to brief trade unions, and a formal consultation and negotiation forum has been established. Trade unions will be able to support their members through the appeal process.

Annual Workforce Report 2025/26

Arabella Smith, Head of Insight Systems and Governance, presented the Annual Workforce Report for the 2025/26 financial year. The report highlighted that the overall headcount at Surrey County Council was 8,509 FTEs as of March 2026, a slight decrease from the previous year. The gender split remained predominantly female (72.8%), with a slight decrease in female employees and a corresponding increase in male employees across directorates.

The age profile showed an increase in employees over 60 and a slight decrease in those under 30. A notable increase was observed in the number of employees sharing they have a disability, rising to over 9% from 5% in the previous year. However, the ethnicity of the workforce remained relatively static, with a slight decline in those declaring ethnic minority backgrounds. Voluntary turnover remained low at just over 9.1%, which was noted as a factor that can limit opportunities to attract a more diverse workforce.

Significant progress has been made in reducing agency spend, with a 27% decrease year-on-year, equating to a saving of £9 million. This reduction was largely attributed to initiatives to hire permanent qualified social workers within the Children's, Families and Lifelong Learning Directorate and the implementation of recruitment controls.

The report also detailed the findings of the Workforce Pulse Survey, indicating areas where the council is performing well, such as strong support from line managers and good collaboration, alongside areas for improvement, including leadership visibility and communication, and support for managing stress. The establishment of eight staff networks was highlighted as a way to support equality, diversity, and inclusion.

Annual Statement of Settlement Agreement Costs

Emma Lucas, Assistant Director for Employment Practice, presented the annual statement of settlement agreement costs for the 2025-26 financial year. The council entered into 19 settlement agreements, with total ex-gratia payments of just over £254,000. This represents a significant reduction from the previous year, which saw 29 cases with costs exceeding £425,000. All payments were made in accordance with council policies and financial regulations, with no individual payment exceeding £100,000. The report concluded that settlement agreements are used as a last resort and are closely scrutinised to ensure they represent the best value outcome for the council.