Shropshire Council to protect as many services as possible as it resizes to tackle its budget challenge

Shropshire Council is taking steps to minimise the impact of service changes on communities; protecting as many services as it can as it makes the changes necessary to tackle its budget challenge, while transforming how it operates to be a smaller, more efficient organisation. 

Like councils all over the country, Shropshire faces a significant budget gap, with savings of £62.5m to be made in this financial year.   

The financial challenge comes from a combination of the rising demand for services provided to local people, especially Shropshire’s most vulnerable residents, and rising costs due to high levels of inflation over a long period.  This is affecting local councils across the UK, but is especially difficult in a large rural county with a higher demand for care services, like Shropshire. 

When Shropshire Council set its budget in February 2024, more than 100 saving measures were approved, including managing demand for services, increasing income, reviewing assets to reduce running costs, reducing spending with third parties and resizing the council to become a smaller organisation. 

Reporting for the end of May 2024, now published, shows delivery is already projected for £35m, 56% of the £62.5m target for the year. 

However the budget challenge is impacted by some of the savings achieved in the last financial year having only been made on a ‘one-off’ basis, and some savings that were not delivered. Our aim is to deliver them all on a permanent basis in the current year.  

At the end of period 2 (31 May 2024), it is currently estimated that this overall pressure could reach £38m, when projected to 31 March 2025, if no further actions were taken. However, the council has a track record of transparently identifying budget pressures early in the year but bringing those under control by the end of the year.  

Shropshire Council is working with transformation partners PricewaterhouseCoopers to support some of its savings plans. Projections show a significant return on investment in the order of 2:1 in this financial year, and over 4:1 next year and beyond as long-term sustainable changes take effect. 

It is estimated that resizing the council will contribute around £27m to the overall savings target. 

As a simple average, this would be equivalent to a reduction of around 540 full-time posts when salary, pension and other on-costs have been considered.  This does not mean 540 redundancies. 

The first steps to reducing the size of the council have already begun, with a programme of voluntary redundancy alongside a detailed review of every post, to establish where any vacancies can be removed to make savings without removing people. The council is also making workforce savings by recruiting existing agency staff, where this is appropriate, reducing agency fees and giving employment benefits to the people doing these jobs. These planned changes began with a reduction in senior management posts.   

These steps are being carried out in this order, alongside detailed reviews of how services are being delivered across the whole council, to increase efficiency and to reduce the number of redundancies needed.   

Cllr Lezley Picton, leader of Shropshire Council, said: 

“Resizing the council is only one of the ways that we are approaching our budget challenge this year.  A significant part of our savings plans is to reduce our spending with third parties and to change the way our customers interact with us, making this more efficient for customers and colleagues. 

“However, our legal duty to set and maintain a balanced budget means we must leave no stone unturned and that means making decisions we have never wanted to make. 

“We are working through the resizing steps carefully to limit any adverse impact to our statutory duties and focusing our resources on those services that support our most vulnerable residents. 

“We will change the way we work to deliver these as efficiently as possible, doing the right jobs in the right way, as the council we need to be. 

“Our financial position is still exceptionally challenging, and our financial survival is key.  

“The savings we have already identified, along with our commitment to detailed monthly reporting, will give us the best chance to overcome this.  At this early stage in the financial year, there is time for us to act and end the year with a balanced budget.” 

See the agenda published for Transformation and Improvement Overview and Scrutiny Committee: Agenda for Transformation and Improvement Overview and Scrutiny Committee on Monday, 15th July, 2024, 2.00 pm — Shropshire Council