Political row over findings of damning report into Shropshire Council's finances

A political row has erupted over the damning findings of an independent report into Shropshire Council’s finances.

The council is currently mired in a significant financial crisis, a position made clear in the government-commissioned report by the Chartered Institute of Public Finance and Accountancy (CIPFA).

The report, which was published this week described the council as in “extremely poor financial health”, warning that it has a “considerable financial gap between what it expects to spend each year and the income and other funding it expects to receive”.

The report lays bare the scale of the issue, with the council predicting a £120.718 million budget shortfall in 2026-27 - rising to £180.318 million in 2030-31.

CIPFA does lay out what it considers the reasons for the issues, saying: “The financial pressures facing Shropshire Council are due to significant increases in net expenditure and a lack of adequate financial management in the past, as well as the legacy impact of freezes in council tax between 2010 and 2016.

“The costs of adult social services and children’s services are the main drivers of the increase in expenditure, largely due to significant increases in the proportion of adults aged 16-64 requiring long term support and the proportion of children in need – especially those in residential care.”

The council was run by the Conservative group for 16 years, up until 2025, when the Liberal Democrats defeated the Tories in the May election.

Both parties have reacted to the report, with the Lib Dem administration saying it makes clear the size of the “financial black hole” left by their predecessors, while the Conservative group said it was “nonsense” to suggest the party had led the authority to the brink of bankruptcy.

Lib Dem Council leader, Heather Kidd, said: "This report is a welcome endorsement of the approach being taken by the Lib Dem administration and confirms what we already knew about the sheer scale of the mess we inherited last year and the extent of the challenge ahead of us.

"It also makes clear that while we are on the right track, we will need to go further and faster to address the scale of the financial black hole left by the Conservatives.

"We have already taken decisive steps to fix many of the problems we were left with. These include transforming the leadership of the council, tackling the appalling contract management that resulted in soaring costs and poor quality control, and securing emergency financial support from the Government - though this is borrowing that will have to be paid back.

"We have also started restoring capacity and capability in key areas following the Conservatives' botched workforce restructuring which left so many council teams, including finance, highways and enforcement, hollowed out.

“The lack of staff in key areas has been causing the council to lose money, so we are prioritising recruitment for posts that will help us generate revenue.

"It's unrealistic to think we could deal with the consequences of 16 years of Conservative mismanagement in less than 16 months, not least because we have also had to deal with serious cuts to our funding from the Labour Government, like so many rural authorities. But the Lib Dems are determined to press on with the tough decisions necessary to stabilise the council's finances and ensure a sustainable future for our residents and the services they need."

Responding to the report Conservative leader, Councillor Dan Thomas, rejected suggestions the report provided a political “gotcha’ moment, and said the financial issues had been dominated by the rising cost of social care - an issue seen across the country.

He said: "The Lib Dems are engaging in tactical political amnesia. They sat in cabinet meetings whilst the Conservatives were running the council with full visibility of the severe, nationwide demand pressures impacting rural social care.

“I welcome the report, it highlights the difficult position we’re in and the one the previous Conservative administration worked under. The CIPFA report sets out a fairly complicated picture: structural deficits, unsustainable demand for adult social care and inadequate funding are all identified as material causes of the council’s financial problems.

“But for the people desperate to read nonsense like the Conservatives bankrupted the council then they will be sorely disappointed. We raised council tax when we had to, we were noted externally for saving more money than any other council in the West Midlands in our last year of office and we know that councils across the country run by all different political parties are facing a very similar crisis.”

He added: “The report doesn’t provide the political “gotcha” moment some are desperate for. In fact, read in full, it makes rather clear that Shropshire’s financial problems are mainly due to the spiralling cost of social care in this country, and people will remember the collaborative budget process we set up in our last year of office.

“The Leadership of the Lib Dems at that time walked away, we as a Conservative group have played our part to help in anyway we can, for the good of Shropshire, putting county before party, people before politics.”