Before considering the devolution priority programme proposals submitted in September, it is helpful to consider the position with regard to Surrey announced on 28 October 2025.
Government has given its support to the proposal to create two unitary councils in Surrey, to comprise West Surrey and East Surrey, proposed by Elmbridge BC, Mole Valley DC and Surrey CC.
The Government also considered the three unitary proposals submitted by the borough councils of Epsom and Ewell, Guildford, Reigate and Banstead, Runnymede, Spelthorne, Surrey Heath, Waverley, Woking and Tandridge DC, but decided to proceed with the two unitary options.
The leader of Epsom & Ewell BC, being one of the councils who has put forward a three unitary proposal, has commented that the council is ‘…extremely disappointed by the Government's decision to proceed with two unitary authorities, effectively creating two 'mega councils' that risk losing local identity and responsiveness to our community's values' and believes that the three unitary model ‘offered a more balanced and representative solution for Surrey'.
The decision follows a seven-week consultation and a delay of around two weeks. The decision marks the first formal implementation of its ambitious strategy for structural reform and is widely considered to be a starting point for its plans to simplify local government and build a strong foundation for devolution.
In its letter of 28 October 2025 to the leaders of the Surrey councils, the secretary of state for housing, communities and local government, Steve Reed, explained the reason for his decision, commenting that ‘although both proposals met the criteria, the proposal for two unitary councils better meets the criteria. In particular, I believe it performs better against the second criterion: Whether the councils are the right size to achieve efficiencies, improve capacity and withstand financial shocks. My view is that the two unitary proposal is more likely to be financially sustainable.'
The secretary of state recognised that this criterion is particularly relevant ‘in the unique context of Surrey, where reorganisation is a critical intervention to improve the financial viability of the area's councils'.
With regard to debt levels within the existing councils in Surrey, Steve Reed's letter goes on to state that Government will commit to repayment in-principle of £500m of Woking BC's debt in 2026/2027.
He states that ‘This is a significant and unprecedented commitment given historic capital practices at the Council. It reflects our acknowledgement that, even after the rationalisation of Woking's historic assets, there is significant unsupported debt held by the Council that cannot be managed locally.'
Surrey CC has commented that ‘financial sustainability is one reason the Government chose the two unitary option' and the repayment is to help ensure this.
Notwithstanding Government proposal to step in to address Woking's debt, present commentators have highlighted that based on the current debt-levels across the Surrey councils, West Surrey Council still stands to inherit a debt of around £4bn.
A Structural Changes Order, subject to Parliamentary approval, is required to abolish the existing councils and establish new structures in Surrey.
A Ministry of Housing, Communities and Local Government (MHCLG) draft Section 24 Direction and requires the existing councils (except Woking and Spelthorne) to obtain consents from the two new unitaries before entering into contracts or disposing of assets.
MHCLG has asked for responses to the draft Order by 7 November 2025 on any factual corrections that may be required and representations on the draft Section 24 Directions by 21 November 2025. Elections of members are due to take place in May 2026, and Government has restated its desire for the new unitary councils to go live on 1 April 2027.
Government expects the Structural Changes Order to provide roles for all the Surrey councils in the Joint Committees and Implementation Team. In his letter, Steve Reed has invited the Surrey councils to establish these on a voluntary basis as soon as possible to support a successful implementation phase.
Whilst the Surrey councils prepare for major structural reform, the council's day-to-day duties and obligations to provide services remain unchanged. Government expects the Structural Changes Order to include provisions for ‘shadow authorities' while the new authorities are in their transitional form.
In a letter also dated 28 October 2025 from the Minister of State for Local Government and Homelessness, Alison McGovern to the Best Value Commissioners for Spelthorne BC and Woking BC, Government confirmed that the proposal is to exclude Spelthorne and Woking from the Section 24 Direction meaning that the two unitaries do not need to consent to any commercial decisions made in relation to Spelthorne and Woking over set thresholds.
Spelthorne and Woking are expected to continue their work to support financial recovery during the transition period in close collaboration with the new authorities.
The proposals for Local Government Reorganisation (LGR) were submitted at the end of September for the four areas within the Devolution Priority Programme (DPP), which resulted in 17 proposals being submitted and are now subject to consideration by the MHCLG.
In summary, the Proposals submitted include the following in terms of the number of unitaries proposed. It is worth noting that within some of the proposals, various options and variants have been put forward in terms of how these could be configured (for example, in one of the five Unitary Proposals for Hampshire and Solent, three different variations were put forward) thereby increasing the number of options for consideration by MHCLG:
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Greater Essex
Four proposals submitted
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1. Four Unitaries (endorsed by Rochford Council)
2. Four Unitaries (endorsed by Thurrock Council)
3. Three Unitaries (endorsed by Essex County Council, Braintree District Council, Epping Forest District Council)
4. Five Unitaries (endorsed by Basildon Borough Council, Brentwood Borough Council, Castle Point Borough Council, Chelmsford City Council, Colchester City Council, Harlow District Council, Maldon District Council, Tendring District Council, Uttlesford District Council and Southend-on-Sea City Council
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Hampshire & Solent
Four proposals
submitted
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1. Five Unitaries one (endorsed by Basingstoke and Deane Borough Council, New Forest District Council and Test Valley Borough Council)
2. Five Unitaries 1A – (endorsed by Fareham Borough Council, Southampton City Council, Eastleigh Borough Council, Hart District Council, Rushmoor Borough Council, Havant Borough Council)
3. Five Unitaries – (endorsed by Winchester City Council)
4. Four Unitaries (endorsed by East Hampshire District Council and Hampshire County Council)
Gosport DC opted out of the negotiations, opposing all options,
Portsmouth City Council have written to Communities Secretary Steve Reed calling for the city to remain on the same footprint.
The Isle of Wight Council did not respond by the deadline
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Norfolk & Suffolk
Suffolk
Two proposals submitted
Norfolk
Three proposals submitted
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1. One Unitary (endorsed by Suffolk County Council)
2. Three Unitaries (endorsed by Babergh District Council, East Suffolk District Council, Ipswich Borough Council, Mid Suffolk District Council and West Suffolk District Council)
1. One Unitary (endorsed by Norfolk County Council)
2. Two Unitaries (endorsed by South Norfolk District Council)
Three Unitaries (Breckland Council, Broadland District Council, Great Yarmouth Borough Council, Borough Council of King's Lynn and West Norfolk, North Norfolk District Council and Norwich City Council
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Sussex and Brighton
West Sussex
Two proposals submitted
East Sussex
One proposal submitted
Sussex
One proposal submitted for the whole of Sussex
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1. One Unitary (endorsed by West Sussex County Council)
2. Two Unitaries (endorsed by Adur District Council, Chichester District Council, Crawley Borough Council, Horsham District Council, Mid Sussex District Council, Worthing Borough Council and Arun District Council)
1. Two Unitaries (endorsed by East Sussex County Council, Eastbourne Borough Council, Lewes District Council, Rother District Council and Hastings Borough Council)
1. Five Unitaries for Sussex (endorsed by Brighton and Hove City Council)
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The challenge for MHCLG is to now decide which, if any of these proposals (and in some cases which of the variants within the proposal) meet the criteria set out in the invitation letters and statutory guidance issued earlier this year, and to take these forward for public consultation.
In the summer, MHCLG outlined their proposed timelines, which indicated the Proposals for those areas within the Devolution Priority Period will be run during November 2025 – January 2026 with a decision on which proposal to implement being taken in March 2026.
It will be interesting to see, particularly given the number of proposals submitted, whether MHCLG can stick to these timescales or whether they get pushed out. The sheer volume and complexities of the submissions suggest a bigger task for a department which has recently undergone change and is also dealing with several different programmes, not least devolution and the progression of the English Devolution and Community Empowerment Bill, as well as progressing its house building agenda.
Once a Statutory Consultation is concluded, it will then be for the Secretary of State to decide, subject to Parliamentary approval, which, if any, proposal is to be implemented, with or without modification, or whether to take no action. They may also take advice from the Local Government Boundary Commission and could implement any alternative proposals made by them.
When looking at the proposals that have been submitted, it's interesting to note the approach which has been taken with regard to the size of each unitary. Initially, the Government's criteria were for a population size of circa 500,000, although it said there was some flexibility in this. The size of unitaries in the proposals currently ranges from 146,351 to 900,862, with a whole range of sizes in between. It will be interesting to see how the size of authorities will factor into MHCLG considerations on the proposals.
In terms of costs of transition, the Government previously estimated an average of £31m per region, but the proposals indicate transition costs ranging from £37.97m at the lower end to £197m at the highest end.
Given the lack of consensus between authorities and that none of them have put forward a single proposal which is agreed upon by all authorities, there is still a long way to go to unify areas. MHCLG will have been very clear how decisions on which proposal is to proceed are made, and that these have been made in accordance with the statutory framework otherwise, there is a real risk of challenge.
Tiffany Cloynes, Partner and Head of Local Government and Rebecca Gilbert, Principal Associate at Capsticks
