A report from the BBC’s Shared Data Unit shows that Surrey County Council has seen one of the steepest increases in the UK. Its borrowing jumped almost 48 percent in a year, from £726.9 million in 2023/24 to £1.07 billion in 2024/25. That equates to £874 per resident, up £282 on the year before.
Hampshire County Council recorded £259.3 million of debt as of March 2025, a 31.2 percent rise on the previous year’s £190.9 million. That equals £175 per person, up from £133.58 the previous year.
At the borough level, Woking remains the UK’s most indebted council. Its total borrowing reached £2.16 billion at the end of 2024/25, up £52.4 million (2.5 percent) on the year before. That equates to £20,601 per resident – the highest figure in the country and more than double the next highest, Spelthorne Borough Council at £10,252.
By contrast, the national average is £1,791 per person.
Woking’s debt spiralled under its former Conservative administration, leading to a bankruptcy declaration in 2023. Since then, the council has been selling off assets to reduce its burden. The council did not issue a formal statement on the latest figures, instead pointing to its Improvement and Recovery Plan.
Other districts showed mixed results. East Hampshire District Council had £116.4 million in debt, down slightly (1.89 percent) from the previous year, equating to £907 per resident. Waverley Borough Council’s borrowing stood at £140.3 million, down 6.3 percent year on year but still £1,062 per person.
Recent restructuring proposals have suggested merging Waverley with Woking and Spelthorne. There are fears such a move could leave residents of the new authority facing steep council tax rises to absorb the combined debt.
Surrey County councillor for Farnham North, Catherine Powell, said reduced funding from Westminster was behind the rise in debt levels.
“The level of borrow that Surrey has, like most upper tier authorities, with responsibility for adults social care, children’s social care, SEND and highways is continuing to increase because of the shortfall in funding from central government, which has decreased by 40 percent in the last 10 years coupled with increased need due to under investment in early intervention / prevention and the health services,” she said.
She added that inefficiencies within Surrey also need to be addressed, particularly in contract management.
Cllr Powell also argued that Woking’s debt should not be passed on to residents in the new unitary authorities.
“It is very clear that the Woking debt is simply not something that can be paid for out of Council tax and the £1.5billion of stranded debt simply must be written off,” she said.
Surrey County Council leader Cllr Tim Oliver said the county was under the same pressures as authorities nationwide.
He said that demand and costs for social care, children’s services and roads were rising while central government funding fell, forcing the council to cut costs and transform services.
He also pointed to high interest rates driving up borrowing costs and said Surrey was holding short-term debt until conditions improved.
“Ultimately, we want to secure longer-term debt to match the investment made in assets and infrastructure, but current rates mean short-term debt is the most prudent course,” he said.
With councils across Surrey facing potential restructuring, questions remain over who will inherit these liabilities if the Government refuses to write them off. Observers warn this could mean sharp council tax rises or cuts to frontline services.
Nationally, councils collectively owed £122.2 billion as of April 2025 – equivalent to £1,791 per resident – according to the Ministry of Housing, Communities and Local Government (MHCLG). That is up seven percent on £114.5 billion the year before.
Jonathan Carr-West, chief executive of the Local Government Information Unit, said the figures “should worry us a lot.”
He blamed spiralling costs of statutory services such as adult social care, children’s services and housing, combined with years of insufficient funding.
“I think the reason that councils are in financial trouble is because we have systemically underfunded local government for the past 15 years, we've created a system in which there is not enough money in the sector and in which councils have become reliant on their own ability to generate money, whether through local taxes or through return on investment,” he said.
Councils are permitted to borrow for projects such as schools, leisure centres and theatres, or to invest in property. But the rise has been fuelled by a near tripling of short-term loans from central government, in some cases used to plug day-to-day budget gaps.
An MHCLG spokesperson said: “While councils are responsible for managing their own budgets, we know that the current funding system is broken which is why we are taking decisive action so local leaders can deliver the public services their communities rely on.
“We have announced over £3.4 billion of new grant funding for local services on top of the £69 billion already made available this year to boost council finances, and we will go further to reform the funding system, including at new unitary councils, to ensure it is fit for the future.”
Hampshire County Council had not responded at the time of publication.
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