Shropshire Council’s Financial Monitoring Period 5 2025/26 has been published ahead of Cabinet next week (Wednesday 15 October 2025).
The report, which covers the first five months of this financial year, shows a slightly worsened position.
If no alterations are made, the council will have overspent its budget by just over £1.2 million by the end of this financial year (31 March 2026), around £300,000 more than it was projecting at the end of period 4.
This is not permitted to happen and if not resolved over the coming months may need the council to issue what is called a Section 114 notice prior to the end of March. This would result in the government taking action to ensure spending was reduced by, if needed, appointing commissioners to take effective control of the council.
It is because of this that the council declared a financial emergency at its last meeting of Cabinet on 10 September 2025.
The latest budget figures within report show that the council is projecting an overspend of £35.531 million by the end of this financial year. This is £1.251 million above the financial resources that the council has.
This figure includes both this year’s projected increases in costs to deliver the essential services and the savings approved by the previous administration during recent years that have not been achieved.
It should be noted that this figure is a projected one, and with continued action the present cabinet and officers of this council are confident that issuing a Section 114 notice can still be avoided.
Several controls to limit spending are in place across the whole organisation and this work will continue alongside further steps to secure future sustainability with a particular focus on reducing spend, increasing income, delivering remaining savings and significant mitigating actions to control in-year spending pressures.
Councillor Roger Evans, Shropshire Council’s Cabinet member for finance, said:
“We are continuing to forecast spending more money than is coming in. Although we are slightly comforted by the fact that this isn’t a huge amount more than we were predicting at the end of period 4, it’s something that we need to get under control now.
“We obviously issued a financial emergency last month and this shows the gravity of the situation we face.
“We inherited this budget from the previous Conservative administration and the savings they failed to make. We have been working hard since May to put in place a number of measures to stop all non-essential spend and reduce essential spend.
“We will need to make some difficult decisions over the next few weeks and months to get ourselves back in a better position.
“We are also talking to the Ministry of Housing, Communities and Local Government (MHCLG), the government department responsible for funding local councils, to discuss options to borrow money to allow us to continue to deliver services in 26/27. This is otherwise known as Exceptional Financial Support or EFS for short. This is just the start of the conversation, and we hope to be able to update you soon on our progress.
“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 75% of the council’s budget.
Roger added:
“It’s no surprise that the lack of Government funding is contributing hugely to our financial challenge. Year after year, this funding fails to account for additional cost of delivering essential services over a large, sparsely populated area.
“We will of course continue to lobby the government for fairer funding allocations that genuinely reflect the needs and challenges of all authorities, including in rural areas with complex challenges such as Shropshire, but we are also determined to reduce our spend to enable us to balance our budget and avoid the issuing of a Section 114.”
The Financial Monitoring Period 4 2025/26 can be found on the council’s website here.
