Spelthorne's borrowing fell £352m to £719m by March, but servicing it still costs three times the council's net income. Councillors see it on 8 September.

Spelthorne Borough Council owed £719.4m at the end of March, £352.2m less than a year earlier. Servicing that debt still costs more than three times everything the council raises in council tax and general grant.

The numbers are in the Treasury Management Annual Outturn Report 2025/26, which goes to the council’s Corporate Policy and Resources Committee on Tuesday 8 September. The detail sits in Appendix A.

How the debt came down

The Secretary of State issued Spelthorne with a Statutory Direction on 8 May 2025. It requires the council to reduce borrowing, set its Minimum Revenue Provision in line with statutory guidance, and sell down its investment property portfolio.

In November 2025 the council restructured £905m of Public Works Loan Board loans. Repaying early earned it a discount of £342m, which is being credited back to the general fund over ten years. The replacement loans are all at fixed rates, with maturities timed to match when the council expects money from asset sales.

Appendix A sets out what changed over the year:

  • Public Works Loan Board loans: £1,061.2m down to £717.5m
  • short-term loans from other councils: £8.0m down to nil
  • right of use leases: £2.4m down to £1.9m
  • total borrowing: £1,071.6m down to £719.4m

Bar chart of Spelthorne Borough Council total borrowing: £1,071.6m at 31 March 2025, £719.4m at 31 March 2026 and a forecast £699m at 31 March 2027

Borrowing is forecast to fall again to £699m by 31 March 2027. The covering report calls that level “unsustainably high for a borough council”. Its own summary rounds the March 2026 total to £718m and splits it differently from Appendix A, which is worth knowing if you compare the two documents.

The measure that has not improved

The affordability indicator compares the cost of financing capital, meaning interest plus the annual charge for repaying debt, with the council’s net revenue stream.

In 2025/26 those financing costs were £56.2m against a net revenue stream of £18.2m. That is a ratio of 309 per cent, and the council reports it as a prudential indicator it failed to meet. Counting the rent the investment properties bring in cuts the ratio to 93 per cent. Appendix A says comparable authorities run at under 18 per cent.

The property portfolio still loses money

Spelthorne holds 12 investment properties, inside and outside the borough, valued at £526.1m on 31 March 2026. A year earlier the figure was £624.3m, itself restated upwards by £37.6m while the accounts were prepared.

For 2025/26 the portfolio produced:

  • rental income of £46.8m, or £42.4m after landlord costs
  • debt servicing of £71.8m
  • a net cost to the council of £29.4m

Appendix A projects an average deficit of £33m a year to 2031/32 if the disposal programme is set aside. It also puts the “overhanging debt”, the gap between what the council still owes against the portfolio and what the assets are worth, at £370m. Knight Frank was appointed to market the portfolio and started in March 2026.

The council’s housing company, Knowle Green Estates, is in the same report. Its net worth fell from £16.67m to £9.14m over the year, and the council has recognised an expected credit loss of £4.7m on the £44.9m it has lent the company. Savills reviewed the company in March 2026 and recommended moving its housing assets to the council, passing them to West Surrey and winding the company up.

What it means for you

The debt does not end with the council. Spelthorne is replaced by the new West Surrey Council on 1 April 2027, and the borrowing goes with it. Appendix A says £435m of the restructured loans was deliberately scheduled to fall due in 2035/36 and 2036/37 so the new authority has room to decide what to do rather than being tied to long-term debt.

Councillors are asked to receive the outturn rather than vote it through, and to approve a revised set of Treasury Management Policies. The covering report notes that member training on treasury management has not taken place yet and will be arranged by the end of October.

The meeting starts at 7pm on Tuesday 8 September in the Council Chamber at Knowle Green, Staines-upon-Thames TW18 1XB. The agenda carries a slot for questions from members of the public, and the meeting is webcast on YouTube.

None of this changes a bill you pay this year. What Spelthorne charges you is set out in our guide to Staines council tax bands, and the borough’s planning caseload is tracked on our Staines planning news page.

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