Reigate and Banstead expects to overspend by £878,000 this year, mostly because six industrial units in Salfords have no tenants. Figures checked 5 November.

An empty distribution centre in Salfords is the main reason Reigate and Banstead Borough Council expects to overspend by £878,000 this year. The Redhill Distribution Centre, listed on the planning register at Salbrook Road, is six large industrial units let out by the council. It has no tenants, so the rent is not coming in.

The shortfall in rent alone is £1,035,000, the council’s first-quarter budget report says. Councillors on the Executive saw that report on 24 September.

The figures now go a step further. On Monday 9 November, the East Surrey Shadow Authority’s executive sees all five district budgets side by side. Reigate and Banstead is the furthest over.

Council Budget 2026/27 Forecast Over or under
Reigate and Banstead £23.608m £24.486m £878,000 over (3.7%)
Tandridge £13.831m £13.856m £25,000 over (0.2%)
Epsom and Ewell £11.868m £11.868m On budget
Elmbridge £24.660m £24.170m £490,000 under (2.0%)
Mole Valley £14.566m £13.213m £1,353,000 under (9.3%)

Source: East Surrey Shadow Authority budget report. These are forecasts made at the end of June.

Where the money is going

The council’s property budget is £1,260,000 over, according to the detailed forecast. Almost all of that is empty space:

  • Redhill Distribution Centre: £1,054,000 over, after a small saving on utilities
  • Regent House: £159,000 of lost income from empty units
  • The Rise, Redhill: £42,000 over, with units 6 and 8 empty and business rates falling back on the council

Other budgets are doing better:

  • Private hire licensing: £257,000 better than planned, mainly from extra vehicle licences
  • External audit: £81,000 better, thanks to an unplanned grant
  • IT: £77,000 saved on support contracts

Leave out property altogether and the council would be £382,000 under budget, the report says.

The second year running

This is not new. The same report a year earlier forecast an £850,000 gap at the site, because leases had expired. It said new tenants “should improve this variance later in the year”.

That did not happen. The gap was forecast at £978,000 by the third quarter and reached £1,063,000 by the year end. That was £795,000 of lost rent and £268,000 of direct costs. The council as a whole finished 2025/26 £336,000 over budget.

Bar chart of the budget gap at Redhill Distribution Centre: £850,000 forecast in the first quarter of 2025/26, £978,000 forecast in the third quarter, £1,063,000 at the end of 2025/26, and £1,054,000 forecast in the first quarter of 2026/27.
The gap reached £1m at the end of 2025/26 and has stayed there. Chart by Reigate News
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The outgoing tenant completed a £1.5m refurbishment of the units, and national and local agents are marketing them.

The September report is frank about the market:

  • finding one occupier for all six units “will be challenging”
  • letting them to several tenants looks more encouraging
  • agents were drawing up terms for a possible letting of one unit
  • “September and October will be a key period”

No published paper we could read on 5 November says whether that letting went ahead. The council’s next quarterly figures should show it.

Is the council in trouble?

The report says not. It says the council “continues to hold healthy reserves and is in a strong financial position heading into Local Government Re-organisation”.

Its reserves table shows how those reserves are expected to move this year:

  • 1 April 2026: £28.7m in the general fund and earmarked reserves
  • 31 March 2027: £14.4m forecast

The biggest single forecast draw is £9.7m from the reserve for housing delivery and community assets. The table does not link any of this to the empty units.

What it means for you

Neither report proposes a service cut or a change to your council tax. This is a forecast, and the council can still let the units before March.

The bigger question is what happens next April, when East Surrey Council takes over this borough’s property and its budget. The shadow authority’s budget report warns that many of the factors behind this year’s forecasts “will continue into 2027/28”. It also says the new council “will be increasingly reliant on Council Tax as the primary source of income”.

The shadow executive meets at 10am on Monday 9 November at the Civic Centre in Esher, and the meeting is webcast.