Shropshire Council provides update on its latest financial position

Shropshire Council has shared an update on its latest financial position, confirming a projected overspend of £53.261 million by the end of the financial year, March 2026. This is a slight increase from the previous position reported and reflects the continued financial pressures facing the organisation. 

A small portion of this gap – £2.516 million – will be covered using the council’s Financial Strategy Reserve, a fund set aside to help stabilise the budget this year. The remaining shortfall will be managed by continuing to reduce spend, increasing income, delivering remaining savings and making changes to the way services are run.

However, as these actions will not achieve the level of savings needed, Shropshire Council submitted an application to the government for Exceptional Financial Support (EFS) in December 2025. If approved, this would help close the council's budget gap and give the council the ability to invest in changes that bring in more income and strengthen key services next year. 

The council’s financial pressure continues to grow due to a combination of rising demand, increased costs and savings that were not fully delivered in previous years. Adult social care and children’s services continue to face particularly high levels of need, including the rising cost of external residential placements and essential additional staffing. 

Shropshire’s rural nature also plays a significant role. As a large, sparsely populated county, it costs more to reach people who need support, and many live in remote areas. Alongside this, Shropshire has an ageing population that is significantly higher than the national average, meaning more residents require care, often with increasingly complex needs. 

At the same time, government funding has not kept pace with these pressures, and limits on Council Tax increases restrict how much the council can raise locally. This combination results in what is known as a structural financial deficit, where the cost of providing legally required services is greater than the money coming in. 

Although the financial challenges remain serious, the council has already taken significant steps to strengthen its position. Spending controls introduced in September 2025 have started to slow the rate of financial pressure, and teams across the organisation are working hard to reduce costs where possible. The council’s Improvement Plan sets out further actions, and a Financial Sustainability Strategy is being developed. 

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

“These are extremely challenging times for Shropshire, and we are facing pressures that have built up over many years. Our costs continue to rise because more people need our help, particularly in social care, and the funding we receive simply has not kept up. Despite this, we are doing everything we can to reduce spend, increase income and put the council on a firmer financial footing. I’m pleased to say that the arrangements we’ve put in place so far continue to be received positively by our independently chaired Improvement Board. 

“This is reflected in our period 9 position – our projected overspend is nowhere near the scale that we’ve seen previously. Also, it’s not unusual to experience continued pressures, especially in winter.  

“However, we recognise that we can’t do this on our own, so our ask to borrow money from the government is a crucial part of our plan to stabilise our budget and allow us to invest areas of the council to bring in much-needed income. 

“Shropshire is particularly impacted as a rural and sparsely populated county, but we are not alone. We are just one of around 100 councils asking for this help, which I’m sure you’ll agree signals a real problem with how councils are funded nationally. 

“We are grateful to our staff, partners and residents for their continued support. There is still a lot of work ahead, but we are making progress on our improvement journey. With the right support from government and continued hard work here in Shropshire, we believe we can stabilise our position and make the long‑term changes needed to protect essential services.” 

A number of reports outlining the council’s financial position and the measures it proposes to take to reduce spending and invest to bring in income will be considered by the council’s Cabinet on Wednesday, 11 February 2026 and then by Full Council on Thursday, 26 February 2026, as part of its budget setting process. 

The Cabinet reports can be found on the council’s website. 

The council expects to hear from the government later this month regarding the outcome of its application for EFS. It also expects to hear soon about the final multi-year funding from the government, both of which will help the council to set a balanced budget this year and next.