‘No room for error’ as cash-strapped Shropshire Council's overspend projected at £38.5m

Figures released for the end of the first period of this year’s financial monitoring will show over half of the council’s £62million savings target is on target to be delivered.

But the remaining forecast overspend, which also includes around £10m of unachieved savings from last year, will wipe out nearly all of the authority’s reserves if further cost-cutting measures cannot be found.

Finance bosses at the council say they are taking action to make additional savings – but the narrow margins involved mean the council is vulnerable to additional in-year budget pressures, and could potentially see reserves dwindle to zero in the event of any unexpected additional costs.

The report will be discussed at a council scrutiny committee next week before going before the council’s cabinet.

Gwilym Butler, Shropshire Council’s cabinet member for finance, said the authority’s quarter one monitoring report showed the scale of the challenge facing Shropshire Council and others up and down the country.

“We have been clear about the difficult decisions we must make as part of the medium term financial strategy agreed by the council in February, the pressure from previous years’ savings that were made on a one-off basis and growing demand for our services,” he said.

“Since the budget information was collected for this report, every service the council provides has started a further rigorous review process to find out what else can be done to make the remaining savings that we legally must make.”

The authority says following around £52m of cuts delivered last year, it is having to resolve more complex problems in order to make further savings in 2024/25.

“Whilst the pressure to make these savings is urgent we must make sure that the difficult decisions we make are the right decisions,” added Councillor Butler.

“[This is] not just to balance the books this year but also to ensure we become the modern, sustainable and efficient council we need to be to continue delivering the Shropshire Plan for our communities.”

Last week, seven West Midlands councils not including Shropshire wrote to Deputy Prime Minister Angela Rayner to ask for more money for local government, warning that the entire region was on the brink of financial collapse.

The Government says it wants to replace the existing one-year budget deals with multi-year financial settlements for local councils to help them with planning, but has made no commitment to providing extra funding.

Shropshire Council’s scrutiny committee will discuss the report on Monday, September 9.