Leaders attempt to save council from bankruptcy

Councillor Heather Kidd said one social care case was costing the authority £1m

Shropshire Council leaders have pledged to do "all that they can" to avoid running out of money by April.

A report presented to the authority's cabinet on Wednesday showed it must make urgent savings to avoid going over budget by £35.2m this financial year - £889,000 of which can't be funded using its reserves or by other means.

Members voted unanimously "with a heavy heart" to declare a "financial emergency" and outlined measures to be put into place to secure tighter control over all aspects of spending.

Liberal Democrat council leader Heather Kidd said the council was struggling to provide essential services due to a lack of funding from central government.

All officers at the council will be asked to take emergency action to reduce all non-essential spending between September and March 2026.

An independently-chaired "improvement board" will also be put in place "as soon as practicable" to monitor progress and challenge all in-year spending.

Shropshire Council's current projected overspend outstrips the cash in its reserves

Heather Kidd, who has led the local authority since May, said it was "spending more day-to-day than we having coming in".

"We know of one social care case that's costing us £1m. Often those are out of our control because they're given to us," she explained.

"I did not become leader to shut things down. We will move this on and become sustainable again."

Shropshire Council has blamed rising demand for and cost of providing social care for its worsening financial position.

The department is £18.2m over budget in providing adult social care, claiming it has seen an increase in complex cases being transferred to the local authority from health services.

A rise in the number of vulnerable children needing external placements, such as foster care or residential housing, has also contributed to a forecast overspend by £9.9m.

In order to balance its books, the council is currently predicted to use all of its reserves, worth £34.3m.

In doing so, the authority will have no money left to mitigate against unforeseen shocks, like a sudden rise in inflation caused by an international event. Even without that, it is currently nearly £900,000 short.

The leader of the council's Conservative group, Dan Thomas, defended the previous Tory administration by highlighting that it had left £4.8m in reserves when it left office.

Councillor Thomas blamed the current financial crisis at the council on a lack of government funding, claiming that rural councils have been disadvantaged by unfair funding formulas.

The council's chief finance officer, James Walton, said his team has had regular conversations with the government, which was "fully aware" of its financial situation.

He said that he and the council's chief executive Andy Begley had been speaking with the Ministry of Housing, Communities and Local Government for over 12 months, about plans to avoid effectively declaring itself bankrupt by issuing a section 114 notice.