Shropshire Star

Financial black hole looms in Shropshire where councillor have appealed for help from new Prime Minister Liz Truss

A council has already written to new Prime Minister Liz Truss over a looming financial deficit.

Shirehall Shrewsbury Shropshire Council

Council officers say that they are on track to post a loss of £9.373 million at the end of the financial year - but it could go as high as an eye watering £17.506 million.

A meeting of the council's all powerful cabinet on Wednesday morning was told that no cuts have been lined up so far but leaders vowed to be "open" about the possibility of services being halted.

Councillor Gwilym Butler, Shropshire Council's portfolio holder for finance and corporate resources, told a sombre meeting that rising inflation had pushed the council into "uncharted waters". He said if it had not been for rising prices the council could well be reporting a balanced budget in its forecasts.

Councillor Butler said the council has written to Liz Truss about the looming situation, which he said was in common with other similar councils. He appealed for county MPs to be lobbied over the issue too.

He praised council staff for working hard to resolve issues during the pandemic and who have now been "thrown into the next crisis." But this time the council is working without £7.6 million in pandemic support and with an agreed pay rise bill of £8 million.

Lib Dem leader Councillor David Vasmer said he is concerned about the council's financial heath. He fears that the council's £15million rainy day reserve pot could be "exhausted" if the higher range of financial forecasts comes to pass.

He added that he was concerned that the new Truss government's focus on cutting taxes could mean that "we are not going to get a great deal of support from them going forward."

The council is also failing to make agreed cost savings and councillor Vasmer said he thinks "general reserves could be exhausted" going into next year. This he said could lead to services being "decimated."

Labour leader Councillor Julia Buckley said she welcomed Councillor Butler "engaging with the new Conservative government" and hoped he had success.

Councillor Buckley said she could see no plan of action apart from speeding up the sale of assets.

"Inflation is not going to be a temporary problem," she said.

"The idea that we can keep selling the silver - which is a one shot solution - does not fix the problem," she said.

"There will come a point where there are no more assets to sell."

She slammed Councillor Butler for raising the prospect of cuts in an interview with the BBC without raising the issue with elected councillors first.

Councillor Butler said he agreed with many of the things the Lib Dem and Labour leaders were saying and repeated that the council is in uncharted waters.

He said that he was "confident" that the council could make savings but would not "run away from the public" if there are "things we will have to change."

"Changes will not just be pushed through," he added.

Council Conservative leader Councillor Lezley Picton said the council faced similar forecasts at this time last year but turned the situation around.

"There is tremendous work being done by our officers," she said.

"Quarter one forecasts are different because you don't know how it is going to pan out."

She added that all of local government is in "uncharted waters".

But she added that the "we wrote to Liz Truss very quickly. We are seeing those pressures day in and day out. It is a perfect storm.

"But I have absolute confidence in our officers. We are almost back to being on a pandemic footing again.

"If we have to take decisions it will be done in an open and transparent manner."

Council background papers revealed that one of the biggest cost pressures is a booming number of children in care across the county. There were in April 610 children in care and the council is spending money on a scheme to try to keep them out of the care system to control costs.

But the officers report added the phrase the council finances are on track for the council to "remain viable" at the end of the financial year next April.

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