Shropshire Council confirms finances in worse state 

After a worsening financial position witnessed over recent months, Shropshire Council has completed a detailed review into all areas of its budget. This has enabled the true scale of the financial challenge facing the authority to be uncovered. 

A report which outlines the council’s financial monitoring position, based on information to the end of September, will be presented to Cabinet in November. 

For the first time the report will include the actual money spent to date called ‘actuals’, not just estimates for the rest of the year. Including actuals enables greater scrutiny of the council’s spending and income and is something that is only beneficial as it gets further into the year.  

The report and projected position will not be finalised and published until 10 November, but early indications show that the council may overspend by £50 million by March 2026 if no alterations are made. 

The council has over £34 million in its savings, otherwise known as its General Fund Balance, to help manage its budget this financial year, but this is not enough to cover the overspending.  

Overspending is not permitted and if not resolved urgently the council may receive what is called a Section 114 Report. The government could then take action to reduce spending by taking control of the council with Commissioners. 

This risk meant the council declared a financial emergency at a meeting of Cabinet on 10 September 2025. 

There is lots of work going on across the council to gain some immediate stability. Work is being focused on stopping and reducing spending, increasing income and delivering savings. But it is also putting plans in place to improve so that it can become sustainable in the future. 

Over the last couple of weeks, the council has had several conversations with representatives from the Ministry of Housing, Communities and Local Government (MHCLG), the government department responsible for funding local councils. 

These discussions initially focused on the ask for longer-term funding the council needs over the next three years to enable it to invest in transformation, stabilise its budget and bring an end to its financial emergency. 

However, the budget pressures this year have meant that the council has also now asked for urgent financial support to help it continue to deliver services until March 2026. 

Asking for more money from the government is not the only thing that the council is doing. It will be making some difficult decisions over the next few weeks and months to save money and bring more in. 

Councillor Roger Evans, Shropshire Council’s Cabinet member for finance, said:   

“For a number of years now the council has been overspending its budget – a budget that was set by the previous administration. Reserves or savings have been used to meet this continued deficit to the extent that all have now been used up. There is none left for us to use to help us meet this shortfall.  

“We all, councillors and staff have been working hard since May to put in place a number of measures to stop all non-essential spend, reduce essential spend, increase income, and try to deliver the needed £60 million of savings that were in the budget we inherited. 

“Due to the monthly reporting an increasing amount of overspend, emergency actions were agreed. Due to the severity of the situation, we declared a financial emergency in September. My thanks and apologies to all our dedicated staff who have tried to turn this council around in just a few months. I know how hard many of you are working. 

“While this does not appear to be enough, we have been very clear on our plans to improve the way in which the council works and what we focus on. We are in the process of developing a plan to improve which will help us to focus on our people, money and priorities over the next 12 to 18 months. This is of course underpinned by a recent Corporate Peer Challenge by the Local Government Association (LGA) and our subsequent action plan. 

“Despite our challenges, I truly believe that together, we can make Shropshire Council sustainable, fulfil the promises we made in our New Direction paper and create a council we can all be proud of.” 

Shropshire Council is not alone in asking for Government funding, called exceptional financial support (EFS). Several councils across the country are already in receipt of this, and more are finding themselves in a similar position to Shropshire. This is mainly due to minimal year-on-year changes in Government funding against soaring costs particularly in social care which, in a sparsely populated and aging county like Shropshire, accounts for nearly 75% of the council’s budget. 

Roger added: 

“It’s no surprise that the lack of Government funding is contributing hugely to our financial challenge. Year after year, this funding fails to account for additional cost of delivering essential services over a large, sparsely populated area. 

“We will continue to lobby the government for fairer funding allocations that genuinely reflect the needs and challenges of all authorities, including in rural areas with complex challenges such as Shropshire, but we are also determined to reduce our spend to enable us to balance our budget and avoid the issuing of a Section 114 if at all possible.” 

Shropshire Council’s financial monitoring report Q2 will be published ahead of Cabinet early next month ahead of the meeting on 19 November 2025.