Shropshire Council is heading for an overspend of £10 million this year, a new report has warned.
The authority’s finance chief has set out plans for “focused management action” in the coming months in order to get the budget back under control.
In his quarter three monitoring report, James Walton, director for resources, says the overspend for the 2022/23 could be anywhere between £4.1m and £17.5m, with a “best estimate” of £9.95m.
The current projection is however a slight improvement on the “best estimate” of £11m at the end of quarter two.
Mr Walton says the council needs to take steps in the remaining quarter of the year to “manage the uncertainty”. He adds: “This includes maximizing and accelerating the delivery of planned savings.”
Any overspend will need to be met from the council’s reserves.
The report will be presented to the council’s cabinet next week, when members will be asked to note the current projections and “consider the detrimental impact of this on the council’s general fund balance and mitigating actions urgently required to avoid this”.
The current projected overspend it put down to ongoing pressures in the cost of social care, as well as the impact of inflation.
The report says children’s social care alone is heading for an £8m overspend, along with £5.1m in adult social care, and £5.3m “unachieved savings” in other areas. This is expected to be partly offset by an £8.4m underspend across the council.
If £10m needs to be taken from reserves to plug the overspend this year, the pot will be left at just £5.6m.
Mr Walton says: “This is an unsafe level for this balance to reach, as it would limit the ability of the council to mitigate any further unforeseen shocks such as ongoing inflationary increases, climate events such as flooding and drought, or reductions in available resources due to changed national policy.”
The best-case scenario of a £4.1m overspend would still leave the council’s general reserves “below the recommended level, but still viable”.
The report will be discussed by cabinet at a meeting next Wednesday.
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