Shropshire Council needs a clear plan to get out of financial mess - Reform

Shropshire Council needs to have a clear plan of how it can get out of its financial mess, opposition councillors have said following a critical auditor's report.

The report, issued last month, largely focused on the 2025/26 financial year, when the budget had been set by the previous Conservative administration.

Auditor Grant Thornton said the council faced significant financial sustainability and delivery risks during that period, blaming a poorly constructed budget, a failure to deliver planned savings and weak financial management arrangements.

And while it acknowledged that the council is on the road to recovery, it said that the authority remains exposed to significant financial risks and has a substantial medium-term funding gap.

For this financial year, the Government bailed the council out to the tune of £121.4 million in exceptional financial support (EFS), although updated forecasts stated that it had reduced to around £90m.

Speaking at an extraordinary full council meeting on Thursday (November 5) where the report was presented, Grant Thornton representative Avtar Sohal said there have to be robust budgets going forward.

"What we're looking for are plans are in place that detail how you [Shropshire Council] get there," said Mr Sohal.

"We probably expect there to be EFS, and that requirement should be reducing. But it needs to be robust and not full of optimistic buyers and other measures which we've seen in prior years.

"If you start asking for more EFS, that shows that the budget is not robust and things will go wrong in terms of controlling costs and income."

For the past seven years the council has received a "limited assurance" rating from its internal auditor.

Duncan Whitfield, the Section 151 officer who oversees the council's finances, said the authority wants to change that during this financial year.

"But that will be a matter for the head of internal audit, who is independent within the organisation, so I wouldn't like to pre-empt what his judgement might be this year," said Mr Whitfield.

"I am not able to commit certainly beyond the next financial year a budget that is balanced without EFS.

"I cannot determine what government funding is going to look like and what the statutory demands, particularly on social care services, will be. And I cannot dictate what council tax will be because we are capped at 4.99 per cent unless we get an exceptional direction from government.

"We will be in EFS for a number of years. The extent of the gap we are working to at the moment is such that we cannot, realistically, seek to cover that off through savings or reductions in services without causing significant impact to residents, including the most vulnerable.

"But I think this is the best value-for-money report in my career. It's a chilling read. It's not a happy outcome, but in the circumstances I think it really lays out our priorities in trying to get to sustainability and recovery. And I'm grateful that it resonates with so many other activities that we're already embarking on."

Councillor Dawn Husemann, leader of the Reform UK group, said "time is running out".

“This is no longer simply an opposition challenge that can be brushed aside," she said.

"It is now a clear requirement from the council’s external auditors. Time is running out, and the Government cannot be expected to provide tens of millions of pounds in emergency support year after year.

“The Reform group is calling on cabinet and the Section 151 officer to publish a single financial recovery plan before the end of this financial year.

"It must set out annual savings and income targets, clear milestones, measurable outcomes, and named officers and portfolio holders responsible for delivery.”

Reform said it has "worked constructively" with members and officers to highlight weaknesses and improve council plans and policies, but members and committees still lack the detail needed to understand the route to financial sustainability or to provide effective scrutiny.

All bar one of the councillors who attended Thursday's extraordinary full council meeting voted to accept the report's recommendations.

One councillor who didn't accept it was Reform member Charles Shackerley-Bennett, who represents Clee.

"This is basically a management consultant's view," he said.

"My experience in life is that those who manage manage. They don't go into management consultancy.

"I know this is a statutory requirement and they try and be the best they can, but it's really a waste of our time and everyone else's time in looking into 'airy fairy' recommendations.

"Every single recommendation is so vague and obtuse - it doesn't make any sense. As a management report, it's useless. I don't think how this council can possibly accept this report in this present format.

"We should reject it and go back to Grant Thornton and say 'go back and do a better job'. That's my view on the matter. I can't possibly accept it."

Fellow Reform member Councillor Carl Rowley (St Martins) added: "We can talk all day about financial stability, I agree with my colleague.

"Impossible. You're not going to achieve it. It's just not going to happen.

"The Government side of it is more important."

Councillor Heather Kidd, the leader of the council, said the organisation "can't carry on the way we were”.

"We will not, and I will never, do this where we come up with figures which can then be pulled to pieces because we've not done that accurately,” she said.

"Part of the position we are in is because we weren't robust in the past with those figures. So, when we publish things, we mean it.

"When we come up with a budget, we know we can actually deliver those savings. We are improving scrutiny. Things take time to be as robust as we need them to be."