Big challenges in the pipeline as council announces its financial strategy

Shropshire Council is preparing to tackle the biggest financial challenge in over a generation.

The challenges highlighted in the council’s Financial Strategy 2015/16 – 2020/21, will be presented at a special meeting of Shropshire Council’s Cabinet on Wednesday 28 October 2015, where details of how the council could fund services in the future will be discussed.

Like all councils, Shropshire Council is faced with the need to make further substantial savings in the coming years. Since 2012, the council has had to save £126m as a result of central government funding cuts.

By 2021 the Government’s £43m revenue support grant – money that is paid to councils each year to help provide services – will end.

By the time this grant ends, it is estimated that the council will be a further £77m worse off, due to the combination of inflationary increases in costs and further cuts in Government grants.

The council has already started to make some headway to tackle the deficit, and has been working hard to find solutions to central government cuts by working with partners and the local community to redesign services and make them more cost effective, whilst maintaining quality.

As a result, the council’s adult social care services, which represents a significant proportion of budget, have been determined by external bodies as being the highest quality and the lowest cost. The council’s wholly-owned company, ip&e, continues to win  external contracts that will generate profit to support the council and Shropshire communities.

The Financial Strategy 2015/16 – 2020/21 outlines the context of the financial challenges and sets out in detail the council’s current and future budget in response to the reduction in Government funding and rising costs. Looking after vulnerable people and growing our economy will remain a priority. In preparation for this funding fallout the council are working to support those in greatest need, and the strategy outlines those services which will remain protected. These include:

• Adult social care commissioned support
• Adult safeguarding
• Adult services – directly-provided services
• Adult services staffing
• School transport
• Child protection
• Waste collection and disposal
• Concessionary fares
• Treasury management.

Projections highlighted in the strategy also show how, due to inflation and the ageing population, the costs of providing adult social care services will continue to rise.

This will leave significantly less funding for other services. So by 2021 89% (£163m) of the budget (£188m) will be spent on those protected services.

This will leave just 11% (£25m) of money left to spend on the remaining 160+ services the council provides to the people of Shropshire currently.

As there will be considerably less money, the council will not be able to deliver the same services as it does now and will need to prioritise how the budget is spent.

Shropshire Council will continue to look at ways to raise income, redesign its services and work with local communities to run services themselves. However, this won’t make up for the funding that it expects to be cut by the Government. Neither will it be able to meet cuts with efficiencies.

In a bid to raise public awareness of these challenges, as part of its “Big Conversation”, the council will be talking and listening to residents and community groups about how best to face the tough financial challenges together.

Keith Barrow, Shropshire Council’s Leader, said:

“With the reduction in resources and spending pressures described in the Financial Strategy it is clear the council will not be able to continue to provide and deliver the same services. It will need to prioritise how it spends money.　

“Faced with the need to make further substantial savings in the coming years, we have to ensure our priorities are driven by what Shropshire people expect us to do. Therefore, we need you to tell us how to prioritise our budget.

“In the coming months we will ensure that everyone in Shropshire gets the opportunity to give their views on the services they value, the services they don’t and the services they may consider to deliver themselves, or as part of their community.

“We really want to know what you think, we will listen and we will feedback what we have done. It’s about you, not just about us.”

Clive Wright, Shropshire Council’s chief executive, added:

“In Shropshire we have anticipated this reduction in central government funding and we have been planning our response for some time.

“The funding of local authorities is changing rapidly. Councils are having to become more self-sufficient as central government devolves power, resources and responsibilities to local authorities. Shropshire has already shown itself to be agile and capable of maximising such opportunities. In every way we are a self-sufficient and resilient community in our outlook and in our ability to evolve and adapt.

“However, we have to face reality: the nature of government cuts means there will be an impact on the services people receive. We want everyone to understand the grim financial picture we face, and work with us to tackle the challenges and the changes ahead.

“We will respond pragmatically to the big events that lie ahead. The Financial Strategy sets out how Shropshire Council proposes to make the best use of its funds and resources as it transfers from the current 2016/17 proposals towards a new longer-term financial strategy, built around a sustainable business model.

“Underlying all this will be the Big Conversation. Through our Big Conversation we’ll be collecting all your views and they’ll be part of the feedback councillors will get before they make any decisions about the council’s future budget, and what services it will provide in the years ahead.”

To view the financial strategy click here.