Government grants Shropshire Council multi-million pound financial lifeline

Shropshire Council has secured a significant package of Exceptional Financial Support (EFS) from central Government, providing a critical buffer for the authority’s finances over the next two years.

The council confirmed today that it has been awarded £71.4 million for the 2025/26 financial year and a further £121.4 million for 2026/27. The funding serves as a green light for the council to borrow the necessary funds to balance its books, as local authorities are legally required to do.

As a condition of the EFS, Shropshire Council must undergo a rigorous independent review of its financial position and governance.

This process will scrutinise the council’s "Improvement Plan," evaluating whether the authority is making sufficient progress toward long-term financial independence. Furthermore, because the support is based on borrowing rather than a direct grant, every penny must eventually be paid back to the Treasury.

While the EFS provides immediate relief, the council leadership continues to lobby Westminster for a fundamental shift in how local government is funded.

Council leaders argued that Shropshire’s unique rural demographics - which often lead to higher costs for service delivery in areas like social care and transport - must be better reflected in future funding formulas.

Heather Kidd, Leader of Shropshire Council, welcomed the news but remained pragmatic about the challenges ahead.

Heather said: "I’m pleased to share the welcome news that the council has been awarded Exceptional Financial Support (EFS) from the Government for this year and next.

“This represents agreement that the council may borrow the money we’ve asked for to propose a balanced budget for 2026/27. This proposed budget will be presented to full Council on Thursday, 26 February, for their consideration and agreement.

“Receiving EFS will require us to receive an independent review of the council’s financial position and governance arrangements. This will include a detailed look at the progress we are making with our plans to achieve financial sustainability over the coming years including all the actions covered in our Improvement Plan. We won’t be able to rely on EFS indefinitely which is why we need to continue to improve and become sustainable.

“Of course, any money that we borrow from the Government will need to be paid back over time. Therefore, we will continue to work hard to ensure that we only borrow what we absolutely need.

“Our conversations with central Government continue and recognise we are not the only Council to apply for EFS, and that in the longer-term sustainable Government funding that better reflects our rural demographics is critical.”

Administration urged not to proceed with proposed 8.99% Council Tax increase

North Shropshire Conservative Association has today urged the Liberal Democrat-led administration not to proceed with a proposed 8.99% Council Tax increase following confirmation that the Council has been awarded EFS from the Government.

A spokesperson for North Shropshire Conservatives said:

“The granting of Exceptional Financial Support changes the situation significantly. The immediate financial cliff edge has been avoided.

"It would now be both morally and financially irresponsible to push through an 8.99% Council Tax rise when residents are already under sustained cost-of-living pressure.

"This support gives the Council time to stabilise its finances properly. Shropshire families should not be asked to plug gaps through record tax rises when alternative support has now been secured.”