What does the council spend its budget on?
Around 77% of the council’s day-to-day budget goes on adults and children’s social care services, which support the most vulnerable people in the county’s communities.
The remaining budget is spent on waste and recycling, highways, leisure, youth services, housing, outdoor spaces and much more; services that people in Shropshire use every day.
How has the budget gap developed?
Councils all over the UK are facing pressure to their budgets, from increased demand for their services and increased costs of delivering these services.
For example, the number of children coming into residential care, funded by Shropshire Council, has almost doubled since 2020. In adult social care, the number of working age adults who need support has also increased. At the same time, costs of goods (such as fuel) have gone up because of high rates of inflation over a long period of time.
This is even more of a challenge for councils in rural areas, like Shropshire, because people who use council services are spread out over a larger area. This means that travelling time is longer and fuel costs are higher and it costs more to deliver many services than it does in towns and cities. The Rural Services Network Fair Funding Campaign explains more.
Which services could be reduced or stopped?
By law, the council has a statutory duty to deliver some services to a certain level. Anything beyond this is known as a discretionary service; local government has the power to provide these when resources are available but is not legally required to.
As such we must focus our resources on those services we are legally required to provide and to do so at the right level.
Some of the proposed changes include:
- Reducing the number of libraries that are run by the council
- Reviewing and reducing the number of leisure centres
- Reducing the number of household recycling centres
- Charging for green waste collections at – households could opt out of this collection if they wish
- Reducing the number of council buildings and other assets and accelerating the move from Shirehall into alternative offices
- Change how we meet the transport needs of children and young people with special educational needs and disabilities – a consultation on this has already begun
The full list of services being reviewed can be found in the Medium-Term Financial Strategy (MTFS)
Significant service changes will need to go through consultation and approvals process before they are made.
How will the council be resized?
It's estimated that resizing the council will contribute around £27m to the overall savings target of £62.5m.
As a simple average, this would be equivalent to a reduction of around 540 full-time posts when salary, pension and other on-costs have been considered. This is a higher number than we had originally talked about, but reflects the most up-to-date and accurate budget and workforce information we have available. This does not mean 540 redundancies.
The first steps to reducing the size of the council have already begun, with a programme of voluntary redundancy alongside a detailed review of every post, to establish where any vacancies can be removed to make savings without removing people. The council is also making workforce savings by recruiting existing agency staff, where this is appropriate, reducing agency fees and giving employment benefits to the people doing these jobs. These planned changes began with a reduction in senior management posts.
These steps are being carried out in this order, alongside detailed reviews of how services are being delivered across the whole council, to increase efficiency and to reduce any redundancies needed.
What is the difference between capital and revenue budgets?
Lezley Picton explains the crucial difference between these budgets in the following video...
How can the council spend money on projects like Smithfield Riverside or the North West Relief Road when services are being cut?
Council budgets include capital spending and revenue spending, and these can be explained in household terms to make them simpler to understand.
Capital spending is one-off spending on things such as new buildings, machinery, equipment and even roads – in household terms it’s like buying a house.
Revenue spending is the cost of running our day-to-day services – to continue the household example this would be grocery shopping, energy bills and monthly mortgage or rent.
For the council, the North West Relief Road and Smithfield Riverside are both capital spending – costs that will be incurred once.
However, the £62m funding gap and pressure is on our day-to-day running costs like contracts with suppliers of services, staff salaries and running costs for buildings and vehicles. These are our revenue costs.
By law, councils cannot use capital funding for revenue spending. The Government offers incentives such as special grants and access to affordable borrowing to help councils fund capital projects, as these can have a long-term benefit for communities.
For example, the initial phase of the Smithfield Riverside development has been funded by the Government’s Levelling Up Funding and can only be used for this purpose.
The Secretary of State for Transport in October 2023 committed to fund the North West Relief Road.
As such these capital schemes will carry on, alongside our plans to make the savings we need in our day-to-day costs of delivering essential services that support the most vulnerable people in Shropshire.
When will any service changes take effect?
Many of the significant changes listed in the Medium Term Financial strategy will need to follow a formal procedure of assessment, consultation and approval before they are made. The timeline below is an approximate guide:
15 Feb 2024 – Our medium-term financial strategy is published with savings
21 Feb 2024 – Our Cabinet considers these proposals
29 Feb 2024 – Council budget set and savings proposals agreed
Spring 2024 – Public consultation on significant changes to services, for example charging for green waste
Spring 2024 to autumn 2024 – Discussions with partner organisations about the possibility of taking over and running council assets or services such as library or leisure provision
Summer 2024 – Consultations with services affected by proposed changes and any alternative ways to
make savings
June/July 2024 – The first report on the impact of measures to reduce demand, spending and whether
further action is required
Autumn 2024 – Start of implementation of service changes that need public consultation
Winter 2024 – If demand for services does not reduce and more funding is not available to meet these
pressures, as we set our next budget we may need to find further savings
How will we accelerate any move out of Shirehall?
Maintaining Shirehall is a significant revenue cost to the council and starting the process of leaving Shirehall sooner will help reduce our budget gap. We are looking now at what we can do to ensure this happens much quicker than originally planned and what other venues in council or partner ownership can be used to help accelerate this. We will keep you updated on how this progresses.
The MTFS refers to charges for car parking at council offices. What does this mean?
One area we need to explore is options around charging for parking at council buildings. While we understand that many of you can choose to work remotely, some of you are required to work in one or more of our offices. Right now, we haven’t got any detail to share with you about what this would mean for employees. There’s a lot of work yet to do and we will ensure that we keep you fully informed as this develops and before any decisions are made.