Shropshire Council auditor’s statutory recommendation

External auditor, Grant Thornton has outlined its concerns about Shropshire Council’s finances in a report following an annual in-depth review. 

While it recognises that some progress has been made, it has identified significant weaknesses in the council’s arrangements for securing value for money, particularly in financial sustainability and governance.  

Because of the seriousness of the council’s financial situation, the report contains a statutory recommendation, which requires the report to be discussed at a public meeting within one month of the report going live. This report will therefore be considered by Audit Committee next Thursday (27 November). 

This statutory recommendation calls for urgent action in four areas:  

• A thorough review of all services to identify the cost of delivering statutory responsibilities and to understand the scale of the structural deficit. 

• Improved accuracy in financial modelling and budgeting, with a focus on reducing optimism bias. 

• Development of a clear, realistic plan to reduce reliance on temporary exceptional financial support and to strengthen financial resilience. 

• Immediate implementation of recommendations from the Internal Audit review to improve budget monitoring and reporting. 

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

“I, the Administration and the council note this report including all its recommendations. They are not unexpected as recent monthly reports have shown we have some serious financial problems to overcome. These, as shown in our internal Audit Reports have been present for a few years. It is noted in Grant Thornton’s report that actions have already been taken in the last few months to address them. 

“These actions have previously been listed and include setting up an independently chaired Improvement Board and a soon to be updated and realistic Improvement Plan. As detailed in Cabinet reports, other boards have also been set up and given powers to act immediately to address the requested actions, as highlighted in this Auditor’s report. 

“Some problems will take time to resolve; changes are needed but some will take a little time to put in place. To allow this we are and have been making requests to the government for permission to borrow sufficient funds to meet both this year’s overspend and give us the necessary time next year for these actions to be put in place. 

“To live within the new financial limits set by this and previous governments will involve us in making a number of hard decisions. Some of these will, by law, involve carrying out consultations and asking for views on a range of possible alternatives.  

“We will also of course take note of any recommendations made by our own Independent Audit Committee.” 

Councillor Duncan Kerr, Shropshire Council’s Chair of Audit and Governance Committee, said: 

“The current Audit and Governance Committee was established in May and was recently enhanced to include all political groups on the council. It has made the improvement in controls and assurance across the council its main priority.  

“The Committee makes an independent assessment of the controls and procedures in the council and it is meeting in public on Thursday 27 November to consider in detail the important and significant recommendations of the External Auditor and assess the response of the council.” 

To read the report, people can visit the council’s website here. It is item 16 on the agenda.