Shropshire Council declares financial emergency amid cost saving measures
The council has blamed it on insufficient funding from central government
Shropshire Council has declared a "financial emergency" as it faces a potential budget overspend of £35.2 million this year.
A report presented to the cabinet revealed that nearly £900,000 of that shortfall can't be covered by reserves or other funding options.
Council members voted unanimously to take urgent action, agreeing to tighten control over spending across all departments.
The move comes as the council struggles to maintain essential services, which Liberal Democrat leader Heather Kidd blamed on insufficient funding from central government.
All council officers will be expected to cut back on non-essential spending until next April.
An independent improvement board will also be set up to monitor progress and scrutinize in-year spending decisions.
Shropshire Council said last week that the figure includes both this year’s projected increases in costs to deliver the essential services and the savings that the previous Conservative Administration during recent years have failed to achieve.
The report was considered at this morning's cabinet meeting of Shropshire Council.
Councillor Heather Kidd, Shropshire Council’s Leader, said:
“We are forecasting spending more money than is coming in and, understandably this can’t continue.
“For me, the alternative is not an option. If we do not produce a balanced budget by March we will be forced – by law – to deal with a Section 114 notice. It means that we will effectively pass over control of the whole council to government-appointed commissioners. Cuts will be made. Services will be dramatically reduced. And it will be many years before the council can properly retake control of both our finances and our services. We must not let this happen.
“We have measures already in place to reduce our spend and substantial savings have already been achieved, but we must now do even more. As a new Administration, this budget is something we have inherited.
“As a council, we must all move quickly to challenge every pound and stop all non-essential spend. If we do this, I’m confident that we can balance our budget by the end of this financial year. And at the same time we are working through plans to become a sustainable council, providing a better future for us all, but it won’t be easy.”
Shropshire Council is one of many councils across the country facing a financial emergency mainly due to a year-on-year decrease in Government funding and soaring costs particularly in social care which accounts for nearly 80% of the council’s budget.