Shropshire Council asks for urgent government financial support

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, which is 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.”