Council "unbelievably close to bankruptcy"

Lezley Picton wants council funding addressed in this month's government budget.

The dire financial situation at Shropshire Council is keeping the leader up at night.

Lezley Picton is in charge of a local authority which, in her own words, is "unbelievably close" to effectively declaring itself bankrupt.

The pressure is taking its toll on the leadership team, which needs to find £62.5m of savings this financial year to close a funding gap.

"I find it really tough," Picton says. "The impact on staff, on all of us, is heartbreaking".

The savings that need to be found this financial year by Shropshire Council equate to £191 per resident, which is more than any other council in England, according to BBC research published today.

The council is blaming a rise in the demand for services for its financial hardship.

The percentage of its net budget that is spent on social care has increased from 58% to 74% over the last six years, and the number of children in council care has risen by more than 80% since 2020.

The council, like all other local authorities across the country, has also been impacted by inflation and a consequent hike in the cost of providing services since Russia invaded Ukraine in 2022.

The council is moving out of Shirehall into smaller, more cost-effective offices

All non-statutory services are being reviewed to find savings, and as departments shrink, 540 full-time posts need to be axed.

"Of course the staff are worried, we're all worried", said the Conservative council leader, who has held the role since 2021.

"We're all really upset about people having to lose their jobs, but we have to make these changes."

Although councils are not technically subject to bankruptcy, if they cannot balance the budget they must issue a section 114 notice, which limits their activities and can lead to government intervention as in Birmingham.

The Liberal Democrat group, co-led by Roger Evans, is expecting to do well at next May's local elections

When asked if she thought Shropshire Council could see out this financial year without such a declaration, Picton could not give an answer.

"We are so desperate to make these savings so the council will continue for the future.

"I will do everything in my power to financially survive, but I can't say one way or the other whether that's possible."

'Too slow to grasp problem'

Opposition parties have agreed that Shropshire Council needs more money, but have accused the authority of not doing enough to find savings.

Liberal Democrat co-leader, Roger Evans, said the current administration had chosen not to invest in areas that would generate extra income, such as placing solar panels on more council buildings or changing to LED street lighting when first recommended in 2017, a potential saving of around £1m a year.

And Labour group leader Rosemary Dartnall said the council had "been too slow in grasping the scale of the problem".

Unison branch secretary Ash Silverstone

The leader of the largest union at Shropshire Council is very concerned about the future of local government.

Unison branch secretary, Ash Silverstone, said more councils "will go under" unless council financing was addressed.

"Without local government, society is going to start to fall apart," he said.

"We're at a tipping point now... are we going to see libraries closed? Are we going to see the end of leisure facilities and theatres? Are we going to see potholes not being fixed?

"Who wants to live in a society like that? I know I don't."