Uncertainties add to budget challenges for council
Uncertainties created by the pandemic and supply chain issues are among some of the challenges that Shropshire Council’s budget faces in the coming year.
These make it harder than usual for the council to predict what its end of year budget position will be, as its first quarter financial report published ahead of the Cabinet meeting on Wednesday 8 September 2021 highlights.
A range of projections for this year estimate a budget shortfall of between £2.5m and £9.7m. At this early stage of the year, the report suggests the council could face a £7.3m budget shortfall if no action is taken: however, it says that the council is now looking at ways to meet this.
Among the key reasons for the projected shortfall are continuing pressure on children’s safeguarding services and loss of income for services such as schools catering, car parking and commercial property income, all of which have been directly impacted by the pandemic, and a delay in the council’s transformation programme.
However, more grant funding could be announced by the Government, particularly to help with one-off pressures linked to the pandemic; although the council says it cannot rely on this coming forward, and must therefore plan accordingly.
Finance teams are also working with services to identify how they can meet the shortfall and many mitigating actions are being developed, which will help address the in-year challenge as well as the longer-term underlying budget deficit of c£39 million rising to £58 million by 2025/26, much of which has been hidden by one-off grants and Government funding in recent years.
Gwilym Butler, Shropshire Council’s Cabinet member for resources, said:-
“We face a unique set of challenges created by the pandemic, pressures such as social worker shortages for vulnerable children, and supply chain issues that are affecting many parts of the economy.
“The first report of the year covers a period entirely impacted by pandemic restrictions, making the job of projecting our financial position even harder, but it’s very important that we plan and prepare now for the uncertainties.
“This includes making sure that our activity aligns with our objectives and plans for a healthy economy and a healthy population for Shropshire, and that all we do is best value using our resources in the best way we can.
“The most worrying concern is our longer-term deficit. This shows why we must continue to fight for fairer funding, and against a system that ignores the extra costs we must meet to provide services in one of England’s most sparsely populated and rural counties.
“In Shropshire it costs us more, for example, to provide social care over sparsely populated distances. We have one of the biggest road networks to maintain in England, yet receive lower funding per mile than many other councils.”