Our financial challenge: reducing our spend by £51 million, while delivering the Shropshire Plan.
Watch Ben Jay bust the myths around our financial challenge: what it is, why it’s come about, and how everyone can help.
What exactly is the financial challenge?
As we’re all aware, we must reduce our spending by £51 million by the end of this financial year. Put very simply, that means reducing spend by around £1 million every week. The £51 million is the gap between what we forecast our spending to be in order to deliver transformative services, and the funding we have in place to cover the costs of running our services day to day.
This funding gap of £51 million has come about for a number of reasons that are largely beyond our control: there is an ever-growing demand for key services, particularly in social care for both children and adults; similarly, older people need more services, and the population of people aged over 65 in Shropshire is higher than the national average. These demographic issues have been exacerbated by very, very high rates of inflation, as well as issues to do with the lingering effects of the pandemic, and the nationwide crisis in cost of living.
That’s why we’re talking about ‘reducing spend’ rather than ‘making savings’. Equally, it’s why, across the council, you’ll hear more about why it’s vital that we reduce demand for our services. This is why we want to encourage our residents to live independently, rather than be dependent on our services and those of our partners. Many teams are already responding to this particular challenge.
So how are we doing?
The good news is at the end of May, we’re very slightly ahead of target with £9 million towards our £51million target already achieved. That’s pleasing – but there’s still a very long way to go. We are confident that with our plans and everyone focused on reducing spend, and leaving no stone unturned, this target will be achieved.
What are the main initial transformation projects?
We have identified six initial projects that will significantly reduce spend. In addition, there are over 100 other projects that teams are carrying out right now, all of which will help reduce our spend, drive efficiency, and deliver the Shropshire Plan.
When will we know more?
Finance teams and budget holders have been working hard to ensure we have as accurate information as possible and that we can have a clear view of where we are for each month of the year. We’ll update colleagues monthly on our progress towards the £51 million target.
What can you do to help?
It’s up to all of us to find ways to reduce our spend. Here are some simple ways you can help right now:
1. Stay within your allocated budget and if you are commissioning spend, ask “do I really need to?”
2. Delay recruiting new staff
3. Stop using agency staff
4. Push any planned spend into the next financial year
Myth busting: 10 myths, 10 truths about the financial challenge
1. We have a savings target of £51m.
These are not budget cuts but reductions we must find in our forecast spend. Our budget has in fact increased year on year, but not enough to meet the growing demand for our service. We have a budget of £645m this year while we expect to spend £695m. This is why reducing demand for our services is so crucial.
2. Finance will sort it again.
No, they can’t and we have no more reserves to fall back. That is why our plan has to succeed.
3.The government will bail us out.
They will not and this has been clearly seen at other councils who are in greater financial difficulty than Shropshire.
4. Commissioners would be a good thing.
Commissioners’ decisions are based on one consideration alone: saving money, not what’s best for the people of Shropshire or this council.
5. There is an alternative solution.
There is not. This is the plan, and this is why it has to succeed.
6. There will be mass redundancies.
There will be no return to “slash and burn” approaches used in the past. Yes, we will be smaller organisation, with a reduced workforce and roles will likely change. We will take sensible decisions that reduce demand on our services.
7. I can’t help and this doesn’t apply to me.
It absolutely does. Everyone can play their part.
8. It’s always going to be like this.
After years of austerity, it may feel like this, but our plans are a turning point to put this council on a sustainable budget, from where we innovate and deliver the objective in the Shropshire Plan.
9. We must be doing something wrong.
No, there are many other councils in very similar situations to Shropshire, while there are growing numbers of others who are much worse. However, very few who have a clear plan as we do to resolve this.
10. £51m is unachievable.
Absolutely not. Yes, our situation is precarious, but this is achievable.