24/08/2023 - Permalink

Finance report shows £34m of spending reductions so far

Related topics: Adult social care / Children's services / Corporate / Finance and budget / Uncategorized

In the first three months of the new financial year, Shropshire Council reports that it already expects to achieve over £34 million of the £51.4 million spending reductions it needs to find this year. 

This is more than the combined savings it has delivered in the last three years and represents two thirds of the total it says it needs to find by next April. 

Its first quarter financial monitoring report shows that £11m has already been banked, with high confidence that another £23m will be delivered before the end of the financial year. 

The council has another nine months to confirm how it will deliver the remaining £17m required and expects the majority of this target will be achieved. 

While this very significant progress towards the £51.4m target is good news, the report also warns that further, new pressures are emerging. 

Additional costs are projected from rising demand for adults’ and children’s services as well as extra costs associated with providing people at risk of becoming homeless with temporary accommodation. 

These new pressures are currently estimated to add a further £20.5m costs to the council during the current year and it must find new ways to reduce these or reduce demand for its services. 

The council has longer to address these new demand-led pressures, however, given its improved General Fund ‘reserves’ position, meaning it has until March 2025 to offset these.

Cllr Gwilym Butler, Shropshire Council’s cabinet member for finance and corporate resources said:-  

“To have achieved and identified this level of spending reductions so early into the year is an astounding achievement.  

“It shows that our medium-term financial plan and focus is paying off, and how hard our dedicated staff are working to deliver the outcomes of The Shropshire Plan, be that financial or otherwise. 

“To achieve this involves some very difficult choices and to achieve our targets will require even more tough decisions. 

“Additionally, rising costs and demand in adults’ and children’s social care, and for temporary accommodation, are creating a new pressure. Working with partners, such as health, and with more time to develop measures to reduce demand further, I believe we can address this too. 

“For many years Shropshire Council has struggled to close its structural funding gap, but we have a clear plan to finally do this and put the council on a sustainable financial footing for a bright and ambitious future. 

“Earlier this month, there have been more reports of other councils warning of their financial plight and potential insolvency.  

“In contrast we have been talking about our situation very openly for some time and as such our plans are not only in place but now progressing well.  Yes, our situation is very challenging, but we have a clear path to financial sustainability. For the first time in many years, we can now see the way ahead and look forward with confidence.” 

The first quarter financial monitoring report will go to the Council’s Transformation and Improvement Overview and Scrutiny Committee and Cabinet in early September.