Auditors flag major concerns about Shropshire Council’s financial sustainability and call for urgent action
An external audit of Shropshire Council's finances has called for urgent action after identifying "significant weaknesses" with how the authority manages its money.
An annual in-depth review of Shropshire Council's finances has identified significant weaknesses in the council’s arrangements for securing value for money, particularly in financial sustainability and governance.
Undertaken by external auditor Grant Thornton, the report contains a statutory recommendation - meaning action is legally required - calling for urgent action in four areas.
Actions include an "immediate review" of all services to identify the cost of minimum viable service provision to deliver its statutory responsibilities.
The audit report also calls for the council to develop a "realistic and deliverable plan over the medium term" to increase financial resilience and reduce reliance on temporary exceptional financial support, and to implement recommendations from a previous internal audit review immediately.
The recommendation requires the report to be discussed at a public meeting within one month of the report going live, and will be considered by the Audit & Governance Committee on Thursday (November 27).
Recent figures showed the cash-strapped authority expected to overspend by £47 million by the end of the current financial year, a significant rise from previous estimations following an in-depth review of past and future spending.
Councillor Roger Evans, Shropshire Council’s cabinet member for finance, said: “I, the administration and the council note this report including all its recommendations.
"They are not unexpected as recent monthly reports have shown we have some serious financial problems to overcome.
"These, as shown in our internal audit reports have been present for a few years. It is noted in Grant Thornton’s report that actions have already been taken in the last few months to address them.
“These actions have previously been listed and include setting up an independently chaired improvement board and a soon-to-be-updated and realistic improvement plan.
"As detailed in cabinet reports, other boards have also been set up and given powers to act immediately to address the requested actions, as highlighted in this auditor’s report.
“Some problems will take time to resolve; changes are needed but some will take a little time to put in place.
"To allow this we are and have been making requests to the Government for permission to borrow sufficient funds to meet both this year’s overspend and give us the necessary time next year for these actions to be put in place.
“To live within the new financial limits set by this and previous Governments will involve us in making a number of hard decisions. Some of these will, by law, involve carrying out consultations and asking for views on a range of possible alternatives.
“We will also of course take note of any recommendations made by our own independent audit committee.”
The report is available to view on the council’s website, at item 16 on the Audit & Governance Committee agenda.
