'Road to bankruptcy': Shropshire councillors in row over £10 million overspend

The council’s Conservative administration faced a storm of criticism from Liberal Democrat and Labour opponents at a cabinet meeting on Wednesday – despite assurance that the authority will be in a much more stable position from next year onwards.

The heated debate came at a cabinet meeting when members were presented with reports on both the council’s current financial position, as of the end of quarter three of 2023/24, and future plans, contained in the medium term financial strategy (MTFS).

Councillor Gwilym Butler, portfolio holder for resources, said current predictions would see the council end the year with a £10m overspend, a slight improvement on the £11m overspend predicted at the end of quarter two.

This would see the council’s general reserves pot shrink to just £5.6m, which finance director James Walton warned in the report was an “unsafe level”.

Councillor Butler said one of the main reasons for the council’s current position was the soaring cost of children’s social care.

He said: “We understand that pressure but it is the right thing to do to look after children, and this council will deliver its statutory responsibilities no matter how hard it gets.”

But Councillor Roger Evans, leader of the opposition Liberal Democrat group, said social care alone could not be blamed.

Councillor Evans said: “For the last 14 years that this council has been run by a Conservative administration, it has been told time and time again that the budget is not sustainable, it’s unsafe, and now that house of cards is starting to fall down.”

His concerns were echoed by Labour group leader Councillor Julia Buckley, who described the predicted overspend as “devastating”.

Councillor Buckley said that both the council’s own finance officers and external auditors were warning that the current financial situation was “unsafe, unsustainable and a huge risk to the council”.

She called for answers as to what the administration was going to do to rectify things, adding: “You cannot continue on this road to bankruptcy.”

These concerns were dismissed by Councillor Butler, who pointed out that the council was expected to bolster its reserves to £40m next year.

He added: “We have the plan, we have the strategy, we have the staff behind us and we will move this organisation on to a sure and stable footing.”

Councillor Butler said the positive outlook for future years would free up officer time across all departments of the council, which would in turn improve services.

He said: “In the last 12 years at least, we have spent year on year looking for savings and changing the organisation as government funding has reduced.

“On delivering this budget, our council will be sustainable in the medium and long term – and all that time and energy on annual savings can be directed into outcomes and policy development for the residents of Shropshire.”

But Councillor Buckley said the plans outlined in the MTFS would cause “devastation” for services provided to residents.

She said: “The most vulnerable residents will be the ones whose services will be reduced and removed.

“When we have finished with this, in your own words, the only provision left in this county will be statutory services. In other words, you are only prepared to deliver that which legally you are required to do.”

Councillor Buckley also said proposals to “delete vacancies” would exacerbate existing problems with lack of capacity in many departments.

Council leader Lezley Picton said she was “disappointed” with comments from opposition councillors, who she accused of being “deliberately misleading”.

She said: “We could quite easily close libraries, close parks, close leisure centres – which other councils are doing.

“But we are not doing that because we are braver than that, we are more ambitious than that.

“We can see a way forward of transforming this organisation, with the staff’s backing, that will make a radical modal shift for this organisation.”