Independent review highlights Shropshire Council’s progress in tackling financial crisis

Shropshire Council Leader, Councillor Heather Kidd, has welcomed a new, independent report into Shropshire Council's finances that has confirmed the Lib Dems are on the right track and making progress in tackling the authority's dire financial situation.

The external review was carried out for the Government by the Chartered Institute of Public Finance and Accountancy (CIPFA) and concludes that the council's new leadership has recognised the failings of the previous administration and is "starting to implement change in culture and working practices".

It adds that the new administration's improvement plan, approved in December 2025, "represents a very positive step in trying to change the culture in Shropshire" and recognises a new focus on "getting the basics right through improvements in financial management practices, in-year spend control measures, the development of a more realistic budget for 2026-27 and a reset of working practices and governance across the council."

The report underlines the findings of a previous review conducted by the Local Government Association, published in both September 2025 and May this year, which found that "the council is now demonstrating a much stronger grip on its financial position."

The new report from CIPFA highlights that years of weak financial oversight by the previous conservative administration, depleted reserves and escalating social care demands led to the current situation, which culminated in the council declaring a financial emergency.

It makes clear that the roots of the current financial crisis lie in a catalogue of decisions and choices made by the Conservative administration. These include:

• Unrealistic budgets and savings targets that were not delivered.
• A flawed workforce restructuring in 2024-25.
• Six consecutive years of internal financial control failures.
• Raiding reserves to offset structural overspends.
• High-risk capital commitments and project failures such as the North West Relief Road, which incurred £39 million in abortive costs.
• Failure to maximise revenue, especially between 2010 and 2016, permanently and severely damaging the council's income base.

In a BBC interview in October 2024, the then Conservative council leader Lesley Picton admitted that the authority was “unbelievably close to bankruptcy”. 

In addition to looking back over the period of Conservative administration, the review included the period immediately after the last local elections, when the new administration was initially hamstrung by the budget inherited from the Conservatives.

It notes that, even following initial measures taken by the new administration, the authority is currently forecasting a funding shortfall of more than £120 million in 2026-27.

Among its recommendations, the report suggests that the council should now:

• Sell off assets such as Shirehall at a faster pace.
• Continue transforming the way services are delivered, especially in the area of social care which represents the biggest proportion of council spending
• Robustly review non-statutory services.
• Explore innovative forms of service delivery, including shared services with neighbouring authorities.

Commenting on the report Cllr Kidd said:

"This report is a welcome endorsement of the approach being taken by the Lib Dem administration and confirms what we already knew about the sheer scale of the mess we inherited last year and the extent of the challenge ahead of us.

"It also makes clear that while we are on the right track, we will need to go further and faster to address the scale of the financial black hole left by the Conservatives.

"We have already taken decisive steps to fix many of the problems we were left with. These include transforming the leadership of the council, tackling the appalling contract management that resulted in soaring costs and poor quality control, and securing emergency financial support from the Government - though this is borrowing that will have to be paid back.

"We have also started restoring capacity and capability in key areas following the Conservatives' botched workforce restructuring which left so many council teams, including finance, highways and enforcement, hollowed out. 

“The lack of staff in key areas has been causing the council to lose money, so we are prioritising recruitment for posts that will help us generate revenue.

"It's unrealistic to think we could deal with the consequences of 16 years of Conservative mismanagement in less than 16 months, not least because we have also had to deal with serious cuts to our funding from the Labour Government, like so many rural authorities. But the Lib Dems are determined to press on with the tough decisions necessary to stabilise the council's finances and ensure a sustainable future for our residents and the services they need."

NOTES

The full report following CIPFA's external assurance review can be found here.

The latest Local Government Association progress report can be found here.

Link to Lesley Picton BBC interview in which she states that the authority was close to bankruptcy.

PHOTO: Liberal Democrat Councillors on Shropshire Council