Shropshire Star

Council leader defends £8.5 million overspend claiming officers 'worked their socks off' to keep spending down

The leader of Shropshire Council has defended the authority for its £8.5 million overspend last year.

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The Shirehall. Shrewsbury

Councillor Lezley Picton said staff and the cabinet had "worked their socks off" to get the overspend down from a worse case scenario of £17 million.

A report to the council's cabinet meeting at the Shirehall on Wednesday said the authority now has just £7.1m left in its general reserves – less than half the minimum recommended level.

In his report James Walton, director of resources said the overspend was slightly less than the £10m predicted at the end of quarter three.

However he warned that the council cannot afford to go so much over budget this year.

Presenting the report Councillor Gwilym Butler, said no one could have expected interest rates to have risen as they had over recent months or that there would have been such a cost of living crisis.

"Inflation is at a 40 year high. If it had been as we had predicted we would have shown a surplus this year.

"We were heading for a storm, we have weathered it and we have come through."

He said the medium-term financial strategy set out an agreed plan to restore the balances to safer levels.

The strategy is also intended to help build the council’s general reserves back up to a sustainable level, which its auditors say should be between £15m and £30m.

Liberal Democrat leader, Roger Evans, said the council had very little left in its general reserves.

"Shropshire Council is in danger of jeopardising its financial solvency," he said.

Labour leader, Julia Buckley, said: "We should be collectively worried about how very grave the situation is. None of us want this council to go bankrupt."

Responding Councillor Picton said: "Everyone is working their socks off to deal with this. The staff are doing fantastic work and yet they are getting constant criticism."

The finance report says interest rates and the soaring cost of both children’s and adults’ social care are to blame for a total overspend of £16.7m across all services.

This was partly offset by an £8.2m underspend in corporate costs, put down to higher interest rates on investments and “slippage” in the council’s planned capital spending programme – a separate pot of money for big one-off purchases and infrastructure projects – meaning lower loan repayments, the report said.