Shropshire Council’s finances have worsened but 'can be managed'

As of December 31, the forecast outturn position was £53.261 million – a deterioration of £2.516m from what was reported two months ago.

However, the council says it can be managed, with the £2.516m being released from the established financial strategy reserve.

Therefore, the outturn position is £50.745m.

Since declaring a financial emergency last September, Shropshire Council has been working with the Local Government Association (LGA) to support actions to rectify the current position.

An initial General Fund Balance of £34.280m indicates that the projected variance would not be accommodated. Contingency funding has been identified within earmarked reserves to provide further resilience over the remainder of the financial year, which includes the winter period.

The council has submitted an application to the Government, via the Ministry for Housing, Communities and Local Government (MHCLG), for what is called Exceptional Financial Support for 2025/26 and future years.

For the remainder of this financial year, it totals £71.4m. That is made up of £22.4m to support revenue expenditure, £10m for transformation activity that cannot be accommodated through capital receipts generation, and £39m to fund any revenue costs arising from the need to write off the spending related to the North West Relief Road should the scheme be cancelled.

A further request for £130m has been made for the 2026/27 financial year. The MHCLG is expected to make its decision by the middle of this month.

The period nine (quarter three) report will be discussed by the Transformation and Improvement Overview and Scrutiny Committee on Monday (February 9) before the council’s cabinet are asked to approve it two days later.

It is recommended that cabinet members:

• Ensure emergency action is continued by all officers during the last quarter of the financial year to improve further the council’s projected year-end position. Such action should predominantly focus on reducing spend, increasing income, delivering remaining savings and significant mitigating actions to control in-year spending pressures.

• Support the review of the Operations Boards, which have been in place from August 2025, to ensure these are delivering the greatest impact in terms of challenging spend across the council. The impact of these boards will continue to inform future finance monitoring reports.

• Consider the projected spend over budget at period nine of £53.261m, adjusted to £50.745m following the release of £2.516m from the financial strategy reserve.

• Consider the indicative level of savings delivery at period nine of £18.177m (30 per cent).

• Consider the projected General Fund Balance of £5m if the council secures exceptional financial support in 2025/26.