'Shropshire Council teetering on the brink of bankruptcy' warns Lib Dem councillor

Last week, Shropshire Council's monitoring report revealed significant strain on its budget, but the authority assured residents that "clear action" was under way to manage the pressure.

Finance bosses warned that they will need to make "ruthless cuts" as financial projections show a predicted overspend of around £38.5m for the current financial year.

The overspend would wipe out most of the council's reserves - leaving what Ludlow Lib Dem councillor Andy Boddington called only enough money "to run the council for half a day".

The latest numbers are just one of a stream of grim projections from the authority as they continue to battle to balance the books.

This time last year, Shropshire Council leaders revealed they had considered issuing a section 114 notice to effectively declare the authority bankrupt – but decided they could not “throw in the towel”.

But Ludlow councillor, Andy Boddington, said the decision "can't be far away".

Councillor Boddington argued that the council had "pumped money into environmentally destructive schemes" like the North West Relief Road and Shrewsbury town centre redevelopment and was now "close to denouement after 15 years of mismanagement."

He added: "This financial mess does not just come from local Conservative mismanagement. Conservative governments have squeezed local council funding knowing that councils will get the blame for declining services not Westminster."

Gwilym Butler, Shropshire Council’s cabinet member for finance and corporate resources, said that the authority had been clear about the "difficult decisions we must make" and said balancing the books was possible by keeping savings plans on track but there was "no room for error or delay".

Councillor Butler also insisted that the authority had not undertaken any external borrowing to fund capital schemes in over a decade.

He said: "Instead, it has carefully applied capital receipts and other sources of funding to delay borrowing and save the Council revenue costs. When we do need to borrow, as set out in our Treasury Strategy and Capital Programme, the costs are accounted for in our revenue budget as set out in statute within the ‘Prudential Code’.

"This week, in transformation and improvement overview and scrutiny committee, group leaders were offered the opportunity to work together with the administration on budget plans for the next financial year instead of providing alternative budgets. This new, collaborative approach would mean our financial position is fully understood by all parties represented in the Council, to develop constructive solutions for future sustainability."