NHS Improvement announced last week that The Shrewsbury and Telford Hospital NHS Trust (SATH), which runs Telford's Princess Royal Hospital and Royal Shrewsbury Hospital, would be placed into special measures.
It came after inspections by the Care Quality Commission (CQC) led to safety concerns and urgent action being taken against the trust.
It will now get increased support and oversight from NHS Improvement to make the necessary improvements.
But Labour officials in the county say the move is a 'dose of the wrong medicine' and have called on the Government to give more funding to the NHS.
A joint statement from Labour Party branches across Shropshire and Montgomeryshire said: "The announcement from NHS Improvement that Sath is now being placed in special measures is a damning indictment of almost 10 years of Conservative health policies and austerity economics.
"Our NHS is now chronically sick following long term underfunding.
"The list of trusts and health services in deficit and/or failing inspections is a clear symptom of the problem, compounded in Shropshire by longer term weaknesses in the trust.
"Special measures are another dose of the wrong medicine.
"We need the significantly higher levels of overall health funding consistently advocated by the Labour Party and costed in the 2017 manifesto.
"Staff are already working hard under extremely difficult circumstances and staff morale must not be eroded even further by this crisis intervention."
Last week, SATH's chief executive Simon Wright and Dr Julian Povey, chairman of Shropshire’s Clinical Commissioning Group, both welcomed the extra support that comes with special measures.
However, other health campaigners have warned the move into special measures will not solve the underlying issues at the trust.
Last week it emerged it had received a third warning from the CQC over the safety of its services.
In its most recent letter, the commission warned the troubled hospital trust about its intensive therapy unit, medical wards and paediatric care.
Previous letters warned trust bosses about issues within its emergency department and maternity wards.
The health watchdog carried out inspections at the trust in August.
Both Telford MP Lucy Allan and Wrekin MP Mark Pritchard had called for the trust to be placed into special measures.