Three quarters of council’s £51m savings target achieved in first half of the year

Three quarters of Shropshire Council’s huge £51.4 million savings target for this year has been achieved in the first six months, new figures show.

A report to councillors says that by the end of September, savings of £38m had either been made or were on track to be made, but says the remaining £13.4m needs to be reviewed as some planned measures are now “in doubt”.

It also says the council is facing additional pressures from higher demand than anticipated in adults’ and children’s social care – meaning a worst case scenario of a £32.3m overspend by next April if no further action is taken.

However the report by James Walton, director of resources, says the authority “continues to robustly manage its finances” and expects to bring this under control over the coming months.

The savings target for this year comes as the council aims to get a grip on its finances once and for all, through a complete overhaul of how services are delivered.

The report says: “We will need to make the adjustments this year but Shropshire residents will reap the rewards for many years to come, through improved financial stability.”

Mr Walton says that going forward, this will enable the council to “grow our potential, seeking continuous improvement, greater resilience and increased efficiency in all aspects of our work”.

The report estimates around £8.2m of the remaining £13.4m planned savings will be achieved by the end of the year.

Mr Walton also says says the council will identify “short-term funding” to meet the £20.5m extra demand in social care costs while long-term plans to reduce demand are implemented.

The report says: “Implementation of demand-management initiatives in social care services to ensure that, wherever possible and safe, early interventions are identified to help prevent children coming into care, and adults to remain independent and delaying the need for long term care and support.

“Given the extent of the demand-led pressures, it is expected that the situation will not be fully resolved in the current financial year.

“As such, and where clear long term plans are set out which can demonstrate success, short-term funding will be made available while successful demand management measures are implemented.”

The council is therefore working on the assumption that it will be left with a £3.6m overspend by next April, which will need to be funded by reserves.

This year’s budget aimed to top the council’s general reserves pot back up after overspends in recent years saw it shrink to just £7.1m – less than half the minimum recommended level.

The council had planned to bring its reserves back up to £27m this year, meaning a £3.6m overspend would still leave it at £23.4m.

The report says this is “above the lower end of the target range”, which is around £15m to £30m.

Councillor Gwilym Butler, cabinet member for resources, said: “The spending reductions identified so far are greater than we have ever achieved before and are a testament to the rigour we have approached this challenge with. 

“Through a comprehensive spending reductions programme, no stone has been left unturned as we look for ways to deliver the best value we can for the people of Shropshire. 

“Whilst we remain under severe pressure, as many other councils do, we can already demonstrate the benefits of innovative and sector-leading approaches to service delivery. 

“Ultimately, we are investing in prevention and long-term sustainability to ensure that the measures we take now continue to deliver rewards for Shropshire Council and for our residents far into the future.”

The report will be discussed by the authority’s transformation and improvement scrutiny committee on Wednesday, November 15, and cabinet later this month.