'Old Mother Hubbard kept taking money from cupboards' - Shropshire council chiefs asked to declare 'financial emergency'
The councillor in charge of Shropshire’s finances has likened the current situation to Old Mother Hubbard going to her cupboard.
Cabinet is being asked to declare a “financial emergency” when it meets on Wednesday (September 10) due to the dire situation the council finds itself in.
The authority has two accounts – the revenue account which is paid for day day-to-day income, and the capital account which can be used to invest and borrow for big projects.
Latest figures show that the council is projecting an overspend of £35.169 million by the end of the 2025/26 financial year. That is £889,000 above what the present financial resources it has.
Legally, this is not allowed, so unless immediate action is taken to balance the books, a Section 114 notice will be served, which stops all but essential spending.
Speaking at a Transformation and Improvement Overview and Scrutiny Committee on Monday (September 8), Councillor Roger Evans, portfolio holder for finance,” said: “If you are spending more than is coming in, it’s misery.
“You can’t continue like that. And for the past four, five, six years, that is what this council has been doing.
“The general fund balance has been topped up year after year. Old Mother Hubbard is going to cupboard b, cupboard c, cupboard d, taking money from there and taking it into the general fund balance during the year.
“So at the year of the year, it always showed ‘positive’. Well those cupboards are now bare and now old Mother Hubbard is now looking at a cupboard with very little in it.
“What we do need to do is make sufficient savings to start putting things in Old Mother Hubbard’s cupboard for that bad winter, or for that unexpected cost. We need to be £5 million in the black or better.”
The council also wants to put in place an independently chaired Improvement Board, which Cabinet is also being asked to back.
Andy Begley, the chief executive of Shropshire Council, said that finding solutions is key.
“I am seeing absolutely no indications that there is going to be any greater funding from central government, either in specific areas or generally for us as an organisation,” said Mr Begley.
“That means our trajectory will continue with the burden of increasing in demand, increasing in costs of supply and therefore those increase in projections. If we can’t vary our income, then the only thing we can do is vary the supply.
“Can we stop providing services? What are non-essential? Can we reduce some of these services?
“But at the same time, we have a series of statutory responsibilities as an organisation in strict legislation, so it becomes a balance of risk in terms of, how do we ensure we are still supplying and supporting services to the most vulnerable in our society and how are we diligently expercising our responsibilities in relation to that, while at the same time we have equal responsibilities in terms of our budget control as a public sector organisation.
“That is the very real challenge we face. If this was a business, then we would take action, but the complexity is we are not a single business.
“The bit that keeps me awake at night is not what have we done but what can we do and what haven’t we done as an organisation.
“I want to make sure we put every mechanism in place that we can.”
