'We will not run out of reserves' – Shropshire Council defends financial position
Shropshire Council has defended its financial position and insists it will not run out of reserves, as suggested by auditors.
The council says that a spending round announcement from the government, which came after auditors had assessed the authority's financial plans, means the organisation will be able to set a balanced budget for 2020/21, and keep up to £17million in reserves.
Earlier this week it emerged that auditors Grant Thornton had warned the council that its reserves may be “fully depleted” by 2021 if current policies continue.
But the council has now responded to the report and insisted it is on target to set a balanced budget.
Peter Nutting, leader of Shropshire Council, said: “The audit report confirmed that Shropshire Council had delivered a balanced budget last year and, following the spending round announcement on Wednesday, September 4, we’re expecting to set a balanced budget for next year whilst retaining up to £17m of reserves – held specifically to help manage the budget – for future years.
"The spending round announcement, which has improved our financial position, was made after our external auditors submitted their report."
Councillor Nutting said that the authority is still facing considerable pressure on its budget, with the costs of adult and children's social care rising by £10 million every year.
The council leader said that an anticipated 'fairer funding' formula from the government could result in more money for the authority.
He said: “Adults and children’s social care continue to increase in costs by over £10 million per year as vulnerable people in our communities need our support more than ever before.
"Shropshire is a high performer in looking after people. We expect that the government will bring in a fair funding solution for social care and this would be a long overdue boost and could solve the gap in our financial projections.
"Although we don’t know precisely when this will be, it is recognised that more funding in the NHS alone, which we acknowledge is necessary, will not solve the problem of bringing people into more affordable but appropriate care settings.
"Often, people don’t realise that the council’s social care staff play a critical role in this, working alongside our NHS partners. We believe that proper funding of children’s and adult social care will be forthcoming in the very near future."
Councillor Nutting said that a shift in financial approach from the authority to a more entrepreneurial organisation is key to creating a stable future.
The council has made some significant moves in this direction, particularly its purchase of Shrewsbury's shopping centres.
He said: “We know that to become financially sustainable and deliver good value to taxpayers we need to continue to innovate and become even more efficient – just like every business has to. To achieve this we are investing to generate new income as well as exploiting new technology which enables new, more efficient, ways of working.
"We are now at a point when delivering through our own staff is often more reliable and cost-effective than some outsourcing.
"This innovation and entrepreneurial approach with our developing ‘can do’ culture continues to deliver a better budget outturn than projected year-on-year.
"Our services are good quality and low cost by comparison. We have more projects underway than ever before. We are confident, therefore, that we will continue to find new and better ways of delivering the outcomes that our communities need, within the budget available, whilst maintaining Shropshire as a fantastic place to live and work."