Shropshire Council trims capital budget amid concerns over borrowing costs

The authority had planned to spend around £400m on capital projects from 2022/23 to 2026/27 – but has revised that down to £280m of 'priorities' because of concerns about the cost of borrowing required to finance the plans.

The projects listed as remaining priorities include the North West Relief Road, Whitchurch Swimming Pool, Oswestry's Innovation Park, the redevelopment of the Pride Hill Centre, school expansions, major spending on fixing county roads, a new shirehall, and the redevelopment of Shrewsbury's Riverside.

But despite being listed as priorities, financing for three of the biggest plans – the relocation of its headquarters, the re-development of Pride Hill, and its ambitious plans for the Riverside area of Shrewsbury – is still to be confirmed.

A report from the council's finance director, James Walton, which will be considered on Wednesday says that £126m in 'alternative funding sources' is needed for the three.

The authority has also confirmed that around £134m of projects have been put on hold, and have been re-designated at 'pipeline aspirational projects for development over a longer term'. The list is not included in the authority's updated plans.

Only last week the council revealed that rising costs were the reason for not going ahead with plans for new swimming pools at the Quarry and Shrewsbury Sports Village.

Mr Walton's report says the rethink over its overall spending plans is down to the cost of borrowing – which is being used to finance around £102m of the schemes.

It said that the original budget of £405m of projects would have a revenue cost of £16m in borrowing – while the revised £280m would have a cost of £5.7m.

In his report Mr Walton writes: "Due to pressures in the revenue budget, it is not possible to continue with schemes that would add a significant further financial pressure through additional borrowing costs, and so the list of projects has been revised to £279.276m."

He added: "However there is still further work required to ensure that alternative funding sources are identified for £126.473m of these schemes to prevent additional borrowing and revenue growth being required."

Shropshire Council's leader, Councillor Lezley Picton, said: “Our capital projects always remain under review. Some of the projects are further down the line than others, but we constantly assess things such as cost.”