Shropshire Council facing estimated £10m budget overspend

Shropshire Council said reserves would have to be used to plug an overspend

Shropshire Council is facing a budget overspend of about £10m, a new report has warned.

Ongoing pressures around the cost of social care and the impact of inflation have been cited as factors behind the projection.

The authority's finance chief has set out plans to get the budget back under control.

Any overspend will need to be met from the council's reserves and councillors will discuss the report on Wednesday.

In the document from James Walton, director for resources, he said the estimated overspend for 2022/23 could be anywhere between £4.1m and £17.5m, with a "best estimate" of £9.95m.

The total is expected to be partly offset by an £8.4m underspend across the council.

But if £10m needs to be taken from reserves, it will leave the authority with a reserves pot of just £5.6m, limiting its ability to address any unanticipated issues, according to Mr Walton.

"Unsafe level"

Children's social care is heading for an £8m overspend, along with £5.1m in adult social care, and £5.3m "unachieved savings" in other areas, the Local Democracy reporting Service said.

In November, the authority said council tax could rise by almost 5% in the county in a bid to address inflationary pressures.

On reserves being potentially reduced to £5.6m, Mr Walton said: "This is an unsafe level for this balance to reach, as it would limit the ability of the council to mitigate any further unforeseen shocks such as ongoing inflationary increases, climate events such as flooding and drought, or reductions in available resources due to changed national policy."

The best-case scenario of a £4.1m overspend would still leave the council's general reserves "below the recommended level, but still viable", he added.

The council, he continued, needed to take steps in the remaining quarter of the financial year to "manage the uncertainty".

"This includes maximizing and accelerating the delivery of planned savings," he explained.