24/05/2024 - Permalink

Final report shows exceptional savings delivery and improved reserves

Related topics: Finance and budget

Final figures for Shropshire Council’s budget for the financial year 2023/24 show the council’s overspend is almost half of what had been expected earlier in the year.

Increased demand for essential services and higher costs are affecting councils all over the country. In Shropshire, the council had predicted a £14m overspend in January 2024 due to those pressures, but this reduced to £7.9m by the end of March 2024.

Steps taken to meet demand for services in different ways, including investing in early help and prevention to meet residents’ needs earlier, have all helped the council reach a better than expected position, while the council has also been able to retain higher levels in its reserves. At the end of March 2024 this stood at £8.2m, an amount it can carry forward into the new financial year. Budget plans agreed by Full Council in February 2024 will add further to this. Reasonable levels of reserves are held to allow the council to respond more effectively to any unanticipated challenges, avoiding an immediate impact on frontline services.

The outturn report shows progress the council has made in addressing the pressures all councils are facing, especially ones with a large, rural geography and higher demand for care services like Shropshire. In total, the council made over £41m of savings in 2023/24, more than it has ever made before.

However, the Medium Term Financial Strategy agreed by Full Council on 29 February 2024 includes a plan to make further savings of £62.5m, as demand for services such as social care and temporary accommodation continues to grow. The plan includes more steps to manage demand for services, reducing spending with suppliers, increasing income, and reviewing property assets, reducing running costs, and creating a smaller but more efficient council overall.

The council is also now publishing monthly reports on progress against the £62.5m savings and has published the first update. Future updates will be published in the same way.

The first monthly report (for the position at the end of April 2024) shows the council is already making good progress. Over 15% of the savings target has already been delivered or is firmly projected to be delivered, and there are plans already in place for another £38m of savings. The remaining £14m is the subject of ongoing work, but finalised plans have not yet been signed off.

Using this forecast and general fund balance, the council expects to remain in budget through the coming year.

Gwilym Butler, Shropshire Council’s Cabinet member for finance, corporate resources and communities, said:

“The outturn report clearly shows an exceptional savings delivery for the 2023/24 financial year, more than the council has ever achieved before, and is the result of robust reporting, a clear plan and hard work by officers. We have also increased our reserves, although this is still far below what is needed for a council of our size and there is absolutely no room for error in our plans to deliver even more savings this year.

“We face a huge challenge, mainly from the effects of rising demand for our services, particularly social care. There will be very difficult decisions we have never wanted to make and we know there will be an impact for our communities and staff. Some of these are already out for consultation and more will follow soon.

“However, the systems we have put in place for monthly reporting mean we are better placed than ever to track our progress against this very challenging outlook.”

Read the full reports on the agenda for Transformation and Improvement Overview and Scrutiny Committee meeting on Monday 3 June 2024.

Find out more about Shropshire Council’s budget plans for 2024/25