Council's financial report shows scale of challenge and early signs of progress
Shropshire Council has published its Financial Outturn Report for 2025/26, ahead of it being discussed by the Finance and Improvement Overview and Scrutiny Committee on 8 June.
The report looks at how much the council actually spent over the year compared to its budget set in February 2025 by the previous administration.
It shows the council spent £49.4 million more than planned in its main (General Fund) budget. This was mainly due to rising demand and costs in adult and children’s social care, along with savings that proved difficult to deliver.
These pressures led to the council declaring a financial emergency in September 2025. Despite action to control spending and an Improvement Plan in place, the gap was too large to close during the year.
To balance its finances, the council had to use its remaining reserves and apply to the government for Exceptional Financial Support (EFS). This is a form of borrowing used by councils facing serious financial challenges.
For 2025/26, the council needed just under £62 million of this support – less than first expected, but still a significant amount.
The report also shows some early signs of progress. Spending became more stable towards the end of the year, and financial monitoring has improved. New processes are now in place to strengthen how budgets are managed.
However, the council is clear there is still a long way to go. EFS is not a long-term solution, and difficult decisions will be needed to make the council financially sustainable.
An updated medium-term financial plan and sustainability plan will be presented in July 2026, setting out the next steps.
Councillor Heather Kidd, Leader of Shropshire Council, said:
“This administration inherited a highly unacceptable situation. It has resulted in a very difficult year, and the report shows the scale of the challenge we continue to face.
“With a lot of work we have managed to balance the books for the year, using our diminished reserves and a large loan from the government in the form of Exceptional Financial Support (EFS).
“Over the last few months we’ve seen signs of change and we must keep going. We now have better controls in place to reduce this happening again in future. “But we are being honest – there is still a long way to go, and more tough decisions lie ahead as we work towards becoming financially sustainable.
“I’d like to thank residents and staff for their support during this challenging time.”
The report will be considered by scrutiny on 8 June before going to Cabinet on 10 June.
