Lead Member: Councillor Roger Evans, Portfolio Holder for Finance

Lead Officer: Duncan Whitfield, Interim Executive Director (S151)

Report to follow - Awaiting significant additional information

RESOLVED:

To agree the recommendations as set out in the report (NB these are too lengthy to include in the decision list so please see pages 2-3 of the report for recommendations here).

The Portfolio Holder for Finance presented the report which provided an updated assessment of the Council’s financial position, funding gap projections and the ongoing need for Exceptional Financial Support (EFS).

Members noted that the estimated funding gap had reduced from previous forecasts but remained significant and that detailed budget planning work was continuing.

The report outlined the Council’s Financial Sustainability and Recovery Strategy, which focuses on strengthening organisational capacity, delivering transformation programmes, improving financial management and achieving long-term sustainability. It was noted that the Council would need to continue seeking EFS in the short term while reducing reliance on borrowing over future years.

Members welcomed improvements in financial management and highlighted the importance of robust monitoring, transparency and scrutiny. Questions were raised regarding assumptions within the financial projections, asset disposals, performance monitoring arrangements and the delivery of savings and transformation programmes. Officers advised that quarterly and ongoing financial monitoring would continue and that further reports on asset management and transformation activity would be brought forward.

Cabinet acknowledged the significant financial challenges facing the authority but noted the progress being made in strengthening financial governance and planning for long-term sustainability.

RESOLVED:

That Cabinet noted that:  

a)    Council agreed a balanced budget for 2026-27 on 27th February 2026, which included in principle agreement from government of EFS of approximately £121m. Council noted at the time the need for future EFS for 2025-26, 2026/27 and beyond based on a number of working assumptions.  

b)    This report presents, on the basis of updated assumptions, the continued need for EFS in 2026-27, 2027/28 and beyond but at a lower level than originally estimated (para 4.1 and 4.2).  

c)     That the need for EFS, while significantly reduced, remain at unsustainable levels and are still subject to formal approval by MHCLG.  

d)    Current assumptions are dependent on the Council delivering 2026-27 services within the budget envelope provided in February 2026.  

e)    Quarterly budget monitoring reports will continue to be received by Cabinet throughout the year including Quarter 1 in September 2026.  

f)      A further MTFP update will be presented to Cabinet in November 2026 including initial budget proposals for 2027/28  

g)    The report notes the ongoing pressures on Shropshire Council’s financial position and on local government finances more generally, including council tax capping and reductions in real terms government funding. 

That Cabinet approved:  

a)    The Finance Sustainability and Recovery Strategy to form the basis for the financial recovery of the Council over the next five years (Section 5 below and Appendix A)  

b)    The Budget Planning Arrangements for the preparation of future budgets including Officer, Cabinet and Member engagement and accountability (Section 6 below and Appendix B). c) The Budget Guiding Principles that will determine the approach to setting priorities when setting balance budgets in the future (Section 7 below and Appendix C)  

That Cabinet instructed the Section 151 officer:  

a)    Together with the Chief Executive. Leader of the Council and the Portfolio Holder for Finance make representations to MHCLG for further EFS and for further increases in Council Tax above the cap in line with previous applications.  

b)    With the support of Service Directors, to prepare indicative budget proposals including savings and future commitment, initially for 2027-28 and then for 2028-29 to 2031-32.