Shropshire Council continues to forecast overspend

This figure has risen significantly since the council issued its financial monitoring for period 5 (a look at spending over the first five months of this financial year) and follows a more in-depth review of spending to date and future spending at period 6, or half-way through the year. 

This projected overspend includes some savings that have been carried over for two years and continuing pressures and increasing costs in areas including adults and children’s services.  

The council holds some funds in reserve, but at £34.280 million these are not enough to cover this projected overspend, leaving a shortfall of £12.289 million. 

Government rules mean that the council is not normally allowed to sell the things it owns to pay for the delivery of services. 

Since declaring a financial emergency in September, the council has: 

- Introduced several measures to stop and reduce its spending. 

- Asked for a loan from the Ministry of Housing, Communities and Local Government (MCHLG), the government department responsible for funding local councils, to help it to continue to deliver services until the end of this financial year, and over the next three years. 

- Received free help and guidance from the Local Government Association (LGA) following a Corporate Peer Review in July. 

- Introduced an Improvement Board to challenge its spending and plans to improve, led by Independent Chair, Tracie Langley. 

- While these will help the council to stabilise, it is also planning for the future.

A big part of this is improving what the council does and how it does it to become sustainable, eventually without the need for further support. The way that it intends to do this will be outlined in its Improvement Plan, which will be discussed at Cabinet early next month (3 December 2025). 

The council is yet to receive an answer from the Government regarding its ask for a loan. However, if it is approved, it will not just be used to plug the funding gap. The request will cover more than one year, and some of it will be used to invest in areas that will help the council to bring in much-needed income and build capacity where it’s needed. 

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

“These are really difficult times but we are doing all we can to enable our council to become sustainable, while also delivering many of the services that residents want and need.

“Our financial position continues to be impacted by pressures on our services and by the fact that the savings have not been made for many years. 

“This can’t continue. All of our reserves have now been used up. We have spoken to the Government to ask for a loan, and we will be talking with them again at the end of this week.

“We are not the only council in this position. Others have asked and have received money, so we’re as confident as we can be that this will be the same for us too.

“It helps that we’re doing many of the things that a Government appointed commissioner would do if we were to declare a Section 114. But what we will also be doing is building for the future whist working with others to provide the services residents want and need. 

“A loan is not a magic fix and we will need to continue to do everything we can to bring our costs down, increase our income and lobby the government for fairer funding as most sparsely populated counties like Shropshire are not receiving a fair grant that will adequately cover the council’s costs.

“Getting ourselves back on track is important for our staff. Over the last few years they’ve made savings of many millions of pounds, and they continue to do so. We say a big thank you for this continued hard work and will try to ensure they get all the recognition that is deserved.”

The council’s financial position is further explained in the Financial Monitoring Report Quarter 2 2025/26, which will be discussed by Cabinet in their meeting next week, Wednesday 19 November 2025.