Nine per cent Shropshire Council Tax increase approved
Residents in the Shropshire Council area are facing a record-breaking hike in their annual bills after the Cabinet formally approved an unprecedented 8.99% increase in council tax today.
The move, sanctioned by the Government following emergency negotiations, will see the average Band D bill jump by more than £160.
Liberal Democrat leaders, who took control of the authority last year, insisted the "inflation-busting" hike was the only way to balance the books and avoid a total collapse of local services.
A "Lifeline" with a Price Tag
Earlier this month, the authority revealed it was facing a £4.3 million shortfall following a "deeply disappointing" central government funding settlement. Leaders argued that the settlement failed to account for the "remoteness factor" — the significantly higher cost of delivering services like social care and waste collection across a large, sparsely populated rural county.
In a bid to stave off a Section 114 notice — effectively local government bankruptcy — the Government granted Shropshire Council "Exceptional Financial Support" (EFS). This "financial lifeline" allows the council to borrow up to £121 million to cover day-to-day spending for the 2026/27 financial year.
However, this support came with a condition: the council was given special permission to raise council tax by an additional 4% above the standard 4.99% referendum cap, bringing the total increase to 8.99%.
"No Choice" says Leader
Liberal Democrat Council Leader, Heather Kidd, said the authority had been "left with no choice" but to implement the maximum increase to bridge the widening deficit.
Councillor Heather Kidd, Leader of Shropshire Council, said:
“I would also like to emphasise my concerns for Shropshire people who are struggling financially. When we talk about these huge sums of money, we must never forget the people we’re here to serve. If you’re going to struggle to pay the increase in Council Tax, there is support for you – please use it.”
“My administration and I do not want to increase Council Tax by 8.99%. Unfortunately, the truth of the matter is that central Government has really given us no choice: government funding for Shropshire has decreased in real terms, whilst the cost of adult and children’s social care continues to rise.
“We are effectively being asked to provide more essential services to the people of Shropshire with less money than ever before.
“Without the extra income from the rise in Council Tax, Shropshire Council would almost certainly have to declare a Section 114 notice and effectively hand power over to government-appointed commissioners. We cannot let this happen. The issuing of a Section 114 notice is often talked about as ‘declaring bankruptcy’. But that’s not true. Debts are not wiped. There is no clean slate. There is no ‘magic money tree’, and any money will need to be paid back.
“Likewise, although I am relieved that we have been granted EFS, I must stress that this is not ‘free money’. EFS is a loan that will need repaying – with interest. The rise in Council Tax, plus the granting of EFS, gives us a breathing space: a chance to implement our Improvement Plan and to become financially sustainable. But that will take time."
“I would also like to emphasise my concerns for Shropshire people who are struggling financially. When we talk about these huge sums of money, we must never forget the people we’re here to serve. If you’re going to struggle to pay the increase in Council Tax, there is support for you – please use it.”
Opposition and Public Outcry
The move has been met with criticism from the Conservative opposition, branding the increase "unaffordable" for local residents during a cost-of-living crisis. Opponents argued that the Lib Dem administration should have found further efficiencies rather than turning to taxpayers.
The 8.99% rise is one of the highest in the country, placing Shropshire alongside only a handful of other struggling authorities, such as North Somerset and Worcestershire, that were granted similar emergency powers.
Residents will see the new rates reflected in their April 2026 bills. For a Band D property, the increase represents a rise from approximately £1,800 to nearly £1,970, before additional precepts for the police and fire services are added.
As part of the government’s support package, Shropshire Council will now be subject to an independent review of its financial governance to ensure it returns to a sustainable footing in the coming years.
