Shropshire residents are facing a council tax rise of nine per cent - how did the council get here?

The mood music from Westminster had suggested that the Labour Government was in no mind to allow councils to increase council tax by more than the 4.99 per cent normally permitted.

So it is perhaps a reflection of the severity of the situation Shropshire Council finds itself in that it has emerged the authority will now be permitted to raise council tax by as much as nine per cent.

That level of rise is unprecedented for Shropshire's upper tier council, and will leave households paying significantly more on the largest council bill affecting their monthly budget.

The council's leadership still needs to decide whether to go ahead with the rise, but having asked the Government for permission to do it - and having been given the go ahead - it would seem a waste of everyone's time not to press ahead.

In the background to the increase is the increasingly perilous state of the council's finances.

The Liberal Democrat administration, which took over in May last year after a comprehensive rout of the previously Conservative-run council, has been growing steadily more alarmed at the developing situation.

First it declared a 'financial emergency'. That has been followed up by requests to the Government for 'exceptional financial support' amounting to around £200m of loans to avoid potential 'bankruptcy', along with the request for permission to raise council tax.

In the midst of this the already-struggling authority was hit with the disappointment of the local government settlement from Westminster, which will see the Government reduce funding for the authority in the coming years, while neighbouring Telford & Wrekin Council sees its settlement go up.

What is at stake for the council - and for residents?

There is no doubt about the scale of the task at hand for Shropshire Council and the consequences of failure.

The authority's predictions show it is set to be an incredible £129m short of balancing the books for 2026/27, a figure that could potentially rise to £195m by 2030/31 - even with the authority making more than £40m in savings every year.

If that's the size of the problem, then what happens if it does fail to balance the books? The answer is Government-appointed commissioners come in and take over, tasked with taking any decisions they can to balance the books while providing the legal minimum service.

The reality of that would be severe, with council services and outside organisations that rely on council support likely to feel the pinch, facing potential closure.

For residents who already feel they get very little in return for their council tax bill, they would be faced with an authority providing considerably less.

The question of why the situation is so stark and how the council ended up in this position is undeniably complex, and dates back many years.

There is no doubt that for successive years the council has failed to fully grasp with the issue of its diminishing resources, and has not cut its cloth accordingly.

While that is true it opens up the wider question of how that has happened. The authority, like others across the country, has seen consistent cuts to its funding from government for more than 15 years, with the burden instead moving to the council tax payers.

There are aspects where the authority has failed to grasp some of the measures that could have softened the impact, such as the revenue generation explored by other authorities - see Telford & Wrekin Council's innovative income from its solar farm.

The insurmountable issue

But, with the best will in the world, while those measures would have helped, they simply do not generate the sums of money needed here.

And Shropshire Council faces one major and insurmountable issue: the size of the area it covers, and its relative sparsity.

Like all councils it has faced major increases in the demand for adult and children's social care, a reflection of societal change which accounts for a huge proportion of its budget. The difficulties of providing those services over such a large rural county also mean they are more expensive for Shropshire.

The council's administration would argue that the Government fails to recognise this cost, leading to underfunding which make the situation worse.

Make no mistake though, the council has over successive years - through a combination of bad decisions and failure to truly rebalance the organisation - left itself in a position where there are no good choices left. The time for those is long in the past.

Expensive gambles on purchasing Shrewsbury's shopping centres, the debacle of Shrewsbury's North West Relief Road, the years-long indecision over Shirehall have all created huge multi-million-pound financial headaches.

There are other issues in the background too, such as the authority's expensive use of consultants, and its failure to ever fully realise the multi-million-pound savings targets it set for itself.

The laudable ambition to keep council tax low has also backfired. By not agreeing greater rises over a steady period of years, the council is now millions of pounds behind where it could be.

The current administration is attempting to tackle the issues. It has cancelled expensive projects such as the Shrewsbury Sports Village revamp, it is looking to devolve services to town and parish councils, and to finally solve the long-term issue of Shirehall.

But the reality is the measures needed to right the ship cannot be put into place overnight.

The issue is unfortunately compounded by a government settlement that provides little in the way of comfort, with Westminster's decisions instead leaving it for Shropshire's council taxpayers to pick up the bill to try and stave off disaster.

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