Rebecca Smith MP for South West Devon has raised fresh concerns over the Government’s failure to provide clear assurances on the protection of district council surpluses under proposed Local Government Reorganisation (LGR) plans, following concerns raised directly with her by local residents and council leaders.

Miss. Smith previously tabled a Written Parliamentary Question asking the Secretary of State for Housing, Communities and Local Government what the Government’s policy is on the treatment of surplus funds held by district councils, including West Devon Borough Council and South Hams District Council, should they be incorporated into a new unitary authority. She also asked whether such surpluses could be used to offset existing debts held by other councils within any proposed unitary structure.

In response, the Department stated that assets and liabilities are expected to remain locally managed by councils. It emphasised the need for councils to continue delivering business-as-usual services during and after reorganisation. The reply referenced the 2024 Guidance on Best Value Standards and Intervention. Still, it did not confirm whether locally held surpluses would be protected or redistributed. Miss. Smith raised the issue again, in response to a statement in the House on Local Government Finance, after hearing further from constituents and council leaders who are concerned that their communities could lose out financially under the proposed changes.

The Minister’s response once again failed to give a definitive answer on whether council surpluses would be ringfenced for local communities.

Miss. Smith said: “I raised this issue because both residents and council leaders have contacted me with serious concerns about what these reorganisation plans could mean for their communities.

Residents in West Devon and the South Hams have every right to know whether money carefully managed by their councils will remain local or be used to cover debts elsewhere. Well-run councils should not be punished for the financial mismanagement of others. The ongoing lack of clarity only adds to widespread concern about the Plymouth local government reorganisation proposals, which risk undermining local communities and fairness."

Ms Smith said she will continue to press to ensure locally generated council funds are not absorbed by a wider authority.