Council asks for urgent government financial help

Roger Evans said he believed the council could become financially sustainable amid its challenges

Shropshire Council has asked the government for urgent financial support to allow it to continue delivering services.

The authority said a detailed review of its budget is expected to reveal it could overspend by £50m if nothing is done and its savings of £34m would not be enough to meet the shortfall.

Unless more money can be found, the council said it would have to issue a Section 114 notice, making it effectively bankrupt.

The council declared a "financial emergency" last month and said it would be "making some difficult decisions over the next few weeks and months to save money and bring more in".

The Liberal Democrat-run authority said the review, due to be published on 10 November, showed "the true scale of the financial challenge".

If it has to issue a Section 114 notice, the government could then take action to reduce spending through the appointment of commissioners, as it has done in Birmingham.

The council said it had had several conversations with the government about the issue, which were initially focused on "longer-term funding the council needs over the next three years to enable it to invest in transformation, stabilise its budget and bring an end to its financial emergency".

But the growing budget pressures have since forced the council to ask for emergency funding.

The authority was run by Conservatives until the Liberal Democrats took control in May.

Roger Evans, the councillor responsible for finance, said: "For a number of years now the council has been overspending its budget – a budget that was set by the previous administration."

He said the council had been using reserves to meet the deficit and there was now "none left for us to use to help us meet this shortfall".

Evans also said a shortage of government funding over the years had been "contributing hugely to our financial challenge".

He thanked staff for their efforts to meet the budget shortfall and added: "Despite our challenges, I truly believe that together, we can make Shropshire Council sustainable."

Council leader Heather Kidd said: "The former Conservative administration repeatedly promised reform and financial discipline but it never materialised, leaving us with a budget that simply doesn't add up."

She said her party was "determined to be honest about the scale of the challenge" and would make it a priority to protect front line services.

Speaking about the shortfall, Kidd said the budget was difficult for the council due to a "number of things".

She told the BBC: "We haven't made the savings year on year for a number of years.

"We've now been using the general fund balance just to prop it up and it's now disappeared virtually.

"Government funding has reduced and reduced and reduced - and we have a huge demographic of older people who need social care."

Council leader Heather Kidd said the county has a higher population of over 65-year-olds on average, in comparison to the rest of the country

Kidd said more than a quarter of the county's residents were aged 65 or more years old, many of whom need social care.

She said: "On average it's only an 18% [population of 65-year-olds] across the country - so we have a significant issue and it costs a lot.

"One complex social care case can cost us a million pounds."

The council leader said it was still unclear how much money the local authority will need, but estimated between £50-£100m.

The council borrowed £29m from the government due to shortfalls in 2024.

Kidd said: "The more money we borrow, the more money we have to pay back and there is interest involved.

"But we will probably need some money coming in so we can smooth this out and become financially stable again

"We need to sit down, if we have this improvement board, and look at this logically with the local government association, so that we borrow just what we need."