The Communities, Environment and Highways Select Committee met on Friday 5 December 2025 to scrutinise the draft Surrey County Council budget for 2026-27, review the performance of Surrey Fire and Rescue Service, and discuss progress on local government reorganisation. Key decisions included the agreement of the minutes from the previous meeting and noting the action tracker and forward work programme.

Scrutiny of the Draft Surrey County Council Budget for 2026-27

The committee extensively reviewed the draft budget for the upcoming financial year, highlighting significant financial challenges faced by local government, including limited funding and rising demand. Councillor David Lewis, Cabinet Member for Finance and Resources, presented the budget, noting that it was set against a backdrop of inflation and the anticipated impact of the fair funding reform proposals from the government, which were expected to result in a flat year-on-year income from central government. He explained that the draft budget assumed a 2.99% council tax increase, but a further gap of £21.3 million needed to be closed. Options for closing this gap included further efficiencies, use of reserves for one-off expenditure, and potentially increasing council tax up to the referendum limit of 4.99%.

Nikki O'Connor, Assistant Director for Finance for Corporate, elaborated on the financial pressures, stating that identified pressures across the council equated to £84 million for 2026-27, largely due to inflation, price increases, and significant demand increases, particularly in social care. Rachel Wigley, Director of Finance and Deputy Section 151 Officer, outlined the next steps, including awaiting the provisional local government settlement, finalising efficiency proposals, and continuing external consultation with residents.

Discussions also touched upon the council's asset disposal programme, with Councillor Lewis clarifying that money raised from asset disposals is capital and cannot be used for revenue purposes, but can offset borrowing costs. The current level of unallocated usable reserves was reported to be around £120 million.

Performance data was discussed, with an example given of an additional £5 million allocated to grass verges and cutting, driven by customer inquiries and complaints. The capital programme was also reviewed, with assumptions made about the sale of council-owned property to fund capital expenditure and reduce borrowing costs. The potential for overage clauses in property sales was also raised.

Concerns were raised about waste management, specifically the Extended Producer Responsibility (EPR) grant, and the reduction in DMV recycling support payments. It was explained that the EPR grant was being reallocated to new initiatives, and that district councils were aware of the reduction in recycling support payments, as government grants were being allocated directly to them.

Investment in bus services, including demand-responsive transport, was discussed, with a £1.7 million pressure for the next year expected to be offset by planned efficiencies across the Place Directorate. The conclusion of climate change projects as an efficiency saving was questioned, but it was clarified that this related to reversing a one-off allocation of funds from the previous year's better-than-expected government settlement, and not the cutting of specific projects.

The parking account showed a £0.7 million pressure, attributed to an increase in penalty charge notices (PCNs) and the fact that the PCN charge limit, set by the government, had not increased in 20 years, while the costs of delivering the service had risen. The council was exploring options such as introducing on-street parking in other locations, lobbying the Department for Transport to increase charges, and increasing resident permit charges. Moving traffic enforcement cameras were also being rolled out, which were more cost-effective to operate.

Regarding non-recyclable waste, the cost per tonne was £111, with a new 10-year contract saving approximately £3 million per year. Initiatives to reduce non-recyclable waste included a programme to increase recycling, improve the quality of recyclables, and encourage reuse and repair, with plans to expand facilities like the shop at the CRC.

The committee also discussed the capital budget, with continued investment in highways maintenance and infrastructure, and the rationale behind it being to prevent asset deterioration. The programme was being flexed year-on-year based on spending, with no programmes being scaled back. The potential impact of inflation on maintenance allocations was noted.

Concerns were raised about the council's vehicle fleet, with 58 vehicles due to reach the end of their life by 2027. The council assesses vehicles on a total cost of ownership basis, and replacements could be electric, hybrid, or petrol/diesel depending on the vehicle type and cost.

Staffing efficiencies in CPD and the safer communities team were discussed, with assurances that these were achievable and would not lead to redundancies. Efficiencies in emergency management resilience would be delivered by not filling vacancies, and fire and rescue operational roles would not be impacted.

The committee also discussed the Your Fund Surrey initiative, with assurances that sufficient funding was reserved to meet approved project commitments. Councillors were informed that they could combine allowances from the small YFS fund up to a total of £50,000 for a single project. The impact and success of Your Fund Surrey projects across different areas were discussed, with a particular focus on tackling health inequalities. The council's social value engine would be used to evaluate the return on investment and impact of these projects, with initial data expected within 12 months.

Surrey Fire and Rescue Service Performance

The committee reviewed the performance of Surrey Fire and Rescue Service, noting substantial progress made in addressing concerns and areas for improvement identified in a previous inspection by His Majesty's Inspectorate of Constabulary and Fire & Rescue Services (HMICFRS). Dan Quin, Executive Director for Community Protection & Emergencies, presented data showing a reduction in primary dwelling fires and an increase in the number of safe and well visits, particularly to vulnerable people. The service was benchmarked as having the second-lowest number of primary fires in the country.

Response times were also discussed, with the first fire engine arriving at critical incidents in an average of 7 minutes and 48 seconds, and the second appliance in 12 minutes and 27 seconds, both well within the service's commitments. The committee heard about the mechanisms in place for performance management, including quarterly reviews by the senior leadership team and reporting to the cabinet.

The sensitive issue of fire fatalities was addressed, with the committee being assured that fatal fire reviews were undertaken to understand the causes and identify preventative measures. The service was also working to improve its workforce diversity, which was identified as a challenging but crucial area for improvement.

The committee also discussed the service's preparedness for future inspections and the assumptions behind its performance plans, including staff availability and operational demand. The importance of water availability in the context of climate change and the development of data centres was also raised.

Local Government Reorganisation Transition Progress Update

The committee received an update on the progress of local government reorganisation, with discussions focusing on the disaggregation of county council services into two new unitary authorities, Surrey East and Surrey West. Nicola Kilvington, Director of Devolution and Local Government Reorganisation, explained that while most services would be disaggregated, some might require temporary countywide hosting. Fire and Rescue would remain a countywide service, with a preferred option of a combined Fire and Rescue Authority comprising members from the two new unitary councils.

Risks associated with small specialist teams, contract novation, and the maintenance of statutory officer roles were discussed, with mitigation measures including knowledge sharing, clear documentation, and temporary hosting arrangements. The committee was assured that preparatory work was underway to ensure the new councils would be legally compliant and prepared to meet their duties as category one responders by vesting day.

The transition of Your Fund Surrey projects to the new unitary councils was also discussed, with contractual monitoring and enforcement arrangements in place. The committee also considered the risks associated with the new councils taking responsibility for their geographically relevant airports.

Strategic Recommendations for Climate Action

The committee welcomed the report on strategic recommendations for climate action and encouraged the maintenance of Surrey County Council's climate programmes during the shadow year. They recommended that the council publish a summary of its climate action achievements on social media. Discussions included how these recommendations would be fed into the new authorities, the importance of the new authorities recommitting to net-zero targets, and how engagement and coordination would operate between existing and new cabinet members. The committee also discussed Surrey's climate action performance compared to other councils and national targets, and how partnership-led environmental programmes would transition to the new authorities.

Action Tracker and Forward Work Programme

The committee noted the action and recommendation tracker and the forward work programme. The date of the next scheduled meeting was rescheduled to 20 March 2026.