Council on track to make £76 million savings
Shropshire Council is on track to make the £76 million savings required over the next four years as changes are made to deliver services differently in the future.
Councils up and down the country are transforming how they work in the face of massive Government funding cuts and a change in culture, which will see councils becoming more about commissioning services rather than necessarily providing services themselves.
A report being considered by Shropshire Council’s Cabinet on Wednesday 20 July 2011 gives an update on the current financial position, and outlines the savings required over the next three financial years (2012/13, 2013/14 and 2014/15).
The savings target for the current financial year is £32.3 million, and the council will achieve that despite challenges arising from the Government “front loading” the cuts – which means the council needs to find the majority of savings this year and next year rather than it being spread over four years.
Despite major service redesign, a staff pay freeze and the proposed pay cut, current figures show that a further £1.5 million is needed to meet the £32.3 million savings target for this financial year, and a further £3.5 million is required to meet the target of £20.2 million in 2012/13. This will also enable the council to meet the one-off £6.5 million redundancy costs in the current financial year as part of the ongoing management restructure. It is hoped these costs will be reduced by retraining staff where possible, and the restructure will save about £5.5 million every year from 2012/13.
Finance officers are recommending that the savings targets can be met without further impact on frontline services by using money which was set aside for building up reserves. The reserves will then be gradually replenished over the coming years when the savings made from changes made this year will start coming in.
Councillor Keith Barrow, leader of the council, said:
“It’s a real challenge to balance our books in the current economic climate, because we have to make massive savings in a very short space of time due to the Government frontloading our budget cuts. We are doing everything we can to make savings by reorganising ourselves and doing things differently rather than cutting services, which is why we are going to build up our reserves over a longer period of time to make sure we meet our savings targets.
“We are still very much committed to increasing our levels of reserves, because it’s important we have money available for emergencies such as major bridge repairs or road maintenance during a severe winter. But I think it’s right to increase the reserves gradually so we can have some flexibility in our budgets to allow us to make the huge savings we need.”
The current savings targets are as follows:
£32.3 million – current financial year
£20.3 million – 2012/13
£16.5 million – 2013/14 and 2014/15