Improvement board to meet to oversee Shropshire Council's finances for the first time
A new improvement board set up to oversee Shropshire Council’s finances will meet for the first time on Monday (November 10).
Chaired independently by a representative from the Local Government Association (LGA), the board features around 15 people, including the group leaders, who all have peer mentors. A member from the Chartered Institute of Public Finance and Accountability (CIPFA) is also likely to be represented.
The board was set up due to the dire financial position the council finds itself in. In September, Cabinet declared a financial emergency with figures showing that the authority will be in an illegal position unless it drastically reduces its overspend. The authority’s latest financial monitoring position will be revealed early next week ahead of Cabinet meeting on November 19.
However, the council has already confirmed that it has worsened. It has over £34 million in savings, otherwise known as its General Fund Balance, to help manage its budget this financial year. However, that is still not enough to cover the overspending.
Because of this, the council has requested “emergency financial support” from the Government as it bids to avoid issuing a Section 114 notice, which will effectively mean the organisation will be declared bankrupt.
If it is called, it could result in the Government taking action to reduce spending by taking control of of the council with commissioners, meaning that all non-statutory spending will be stopped.
The Liberal Democrat-run administration – who swooped into power following May’s local elections – said there was a “major-in-year-budget gap” after carrying out a deep-dive into the council’s accounts.
Councillor Heather Kidd, the leader of Shropshire Council, said the Lib Dems inherited a budget that “simply does not add up”, and accused the former Conservative administration of “broken promises” over savings plans.
Setting up an Improvement and Assurance was just one of the recommendations the LGA made after visiting the council in July. It is also part of Shropshire Council’s new strategic direction as it aims to stabilise its finances and ensure long-term sustainability.
