Shropshire Council is on the brink of ‘financial ruin’ say opposition leaders

Opposition leaders have warned Shropshire Council is on the brink of “financial ruin” after a report this week laid bare the huge challenge the authority faces to balance its budget this year.

Labour and Liberal Democrat councillors said the report from the Local Government Association (LGA) echoed concerns they had been challenging the council’s Conservative administration over for years.

The report assesses how the council is addressing areas of concern identified in by an LGA ‘peer challenge’ team following a visit last June.

It sets out how the council needs to deliver at least 95 per cent of its planned £51.4 million of savings in 2023/24 in order to “avoid depleting its reserves to a level which seriously jeopardises its financial solvency”.

While noting the council’s “new-found confidence” in plans to transform how services are delivered was “encouraging”, the review team said contingency plans needed to be drawn up urgently in case the expected savings could not be delivered in the current financial year.

The report also said the peer review team was concerned that some elements of the savings programme had been factored in from the start of the financial year, despite not being programmed to start straight away.

Councillor Julia Buckley, leader of the county’s Labour group, said: “These are concerns that we in the Labour opposition group have been raising for some time.

“We have repeatedly drawn attention to the fact that year-long savings are not deliverable on day one, especially for those services that require consultation with service users before any cuts can be made  – something we have ensured is done correctly to measure impact on residents.”

She said the council’s overspend of £8.5m in 2022/23 was “very worrying”, particularly as it was blamed on inflation and the rising cost of social care, which are both ongoing issues.

Councillor Buckley said: “I have repeatedly asked for contingency plans to protect the local authority from unexpected shocks.

“Now, the LGA finance review is asking for the same contingency planning and it is very much needed.

“My message to the Conservative administration running our council into the ground is simple – protect our residents and services from financial ruin.”

She added: “I would normally offer a glimmer of hope to residents by reminding them that they have the opportunity to vote for a different administration in the local elections of May 2025, but at the current rate of demise, it seems highly unlikely that Shropshire Council will remain solvent for two more years.”

Councillor Roger Evans, leader of the Liberal Democrat group, said opposition members had been kept in the dark.

He said: “The council is in big, big financial trouble. They need to be open and transparent on how and what plans it has to overcome this and to still be running council in 12 months’ time.

“No one wants the heavy hand of government to appoint others to take control.

“To continue trying to hide the facts just will not work. They want the opposition parties to join and work with them but refuse to allow ‘us’ to know the facts.

“We, who are not members of the secret society that at present run the council, deserve to be informed and told how and what are the plans to reduce the councils spending by over £1m per week.”

The report states that the council will know whether it will be able to deliver the required savings by the end of the first quarter of the financial year.

Councillor Evans said: “The end of quarter one is on June 30. Will Shropshire Council still be in control of its finances at the end of this year or will the government be running it as the council will eventually have to admit it’s bankrupt?

“As the visiting team state, after many years of financial mismanagement, when planned savings were continually not made, there is still time.

“However, where are these savings to be made? Many are still not identified. The amount needed to be saved per week and per month increase and increase as the year advances.n

“My fear is yes, unless things dramatically and quickly change our cabinet will comprise of government appointed commissioners.”

Speaking after the report was published earlier this week, Councillor Gwilym Butler, cabinet member for resources, said the council understood the scale of the challenge but was confident that its bold savings plans would come to fruition.

Councillor Butler added that once the savings have been made this year, the council will have a “stable and more sustainable foundation to our finances” going forward.