Shropshire Council is set to consider two crucial financial reports – the Medium-Term Financial Plan (MTFP) and the Capital Plan – in upcoming meetings of the Transformation and Improvement Overview and Scrutiny Committee on 19 January 2026 and Cabinet on 21 January 2026.
These reports outline the significant financial challenges facing the council, and the ongoing steps being taken to stabilise finances and secure a sustainable future – a key aim of the Council’s Improvement Plan approved by the council in December 2025.
The MTFP shows that, over the next four years if no action is taken the council will continue to face a significant, and increasing, gap between income and expenditure, mainly driven by reduced government funding and an increased reliance on Council Tax to fund the rising costs of delivering essential council services. The report references the intention to develop a financial stability strategy that is focussed on reducing expenditure, increasing income, managing future demand growth through early help and prevention, and enhancing the use of technology to improve service delivery.
The Capital Plan, which has been reviewed following a change of administration and the declaration of a financial emergency in September 2025, will prioritise capital schemes that will improve the council’s financial position and maximize external funding opportunities. This does however mean that some schemes may be paused or stopped.
Councillor Heather Kidd, Leader of Shropshire Council, said:
“We now know the full seriousness and size of the challenge we are facing.
“We introduced immediate measures to reduce spending and have asked for exceptional financial support (EFS) from the government. But our financial position has worsened with the proposed government settlement While know we will need to fundamentally change the way we do things, including considering what the role of the council should be in delivering, enabling or influencing priority outcomes for the county and its residents, there is a structural financial deficit. This means we do not have the income (government funding and Council Tax) to deliver the essential services that central government expects us to deliver.
“EFS is not the solution to our problems, in fact it will cost around £12 million each year in borrowing, but it will give us the time we need to develop our plans for both short term financial stability and longer term sustainability, while continuing to work with our MPs and Rural Services Network (RSN) to lobby the government for change.
“In the meantime, we remain committed to our plans for improvement, including our recently approved Improvement Plan to strengthen our financial management, and our People Plan to support workforce development. This also includes further service changes, more difficult decisions, looking to our partners to support delivery, and income generation.
“While our spend on capital projects comes from our capital budget – money which can only be spent on big, one-off projects that create or improve assets and infrastructure, rather than funding the delivery of services – we still need to think carefully about how we spend it and whether it’s right to borrow more now which will put further pressure on our budgets. Those capital projects which bring in an income will remain a priority for us.
“We were extremely disappointed with the government’s recent funding announcement, the news of which we received just before Christmas. The initial figures we’ve been given will leave us with less money and make it even harder to provide essential services.
“We remain committed to standing up for Shropshire and are urging the government to reconsider these plans before they cause serious harm to our local communities. We expect our final settlement to be announced early next month. Right now, this policy places the burden of national decisions onto local councils, forcing us to raise Council Tax just to keep essential services running.”
Shropshire Council’s budget consultation is open until tomorrow (16 January 2026) and it’s encouraging residents and stakeholders to have their say as it works to set a balanced budget for the year ahead and secure the long-term sustainability of local services.
To get involved, people can access the survey here: Budget consultation | Get Involved – Shropshire Council Consultation Portal
Further information
Since declaring a financial emergency in September, the council has:
- Introduced several measures to stop and reduce its spending.
- Asked for emergency financial support (EFS) from the Ministry of Housing, Communities and Local Government (MCHLG), the government department responsible for funding local councils, to help it to continue to deliver services until the end of this financial year, and next year.
- Continued its work with its partners to find ways to ensure that residents continue to receive the support and services they need, but not necessarily through direct provision by the council.
- Received free help and guidance from the Local Government Association (LGA) following a Corporate Peer Review in July.
- Introduced an Improvement Board to challenge its spending and plans to improve, led by Independent Chair, Tracie Langley.
- Considerable work has been undertaken to review actual spend and previous unachieved savings to reset the 26/27 budget.
