Council budgets and spending Budget FAQs
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.
My council tax has increased this year, how will this be spent?
In 2024/25, Shropshire residents will pay 4.99% more for the part of their council tax bill set by Shropshire Council. The Government assumes that all local authorities will make the same increase, and this includes a 2% precept on adult social care.
95% of all councils with a responsibility for social care have raised their bills by this amount.
Council tax is our main source of income and since 2015/16 the proportion of our funding that comes directly from council tax has gone from 57% to 78% as government funding to councils has decreased.
By far the biggest proportion of our budget is spent on social care, supporting the most vulnerable residents in Shropshire. It also goes towards waste collections, recycling, highway maintenance, schools, transport, leisure and many more services that residents use every day. This receipt gives an illustration – this may vary year by year and depends on different factors, including demand and inflation.
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 changes include:
- Reviewing the strategy for library provision to make savings
- Reducing support for leisure provision
- Reducing the number of household recycling centres
- Charging for green waste collections – 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
- Changing 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) and significant service changes will need to go through consultation and approvals process before they are made.
Will all these services stop altogether?
Wherever possible we will be seeking to work with partners or local communities to see how, for example, smaller libraries or leisure services can be transferred out of council control and continue to be run by other organisations and remain open for use by the community. We will be having these conversations as soon as possible with any groups interested in taking on such services.
How will the council manage the impact of the proposed changes?
The plans to close our budget gap include decisions that we never wanted to make but have taken because we have no other choice. We are required by law to set a balanced budget.
We will continue to deliver statutory services, finding more efficient ways to do this wherever we can, but there will be a significant impact to residents and communities where discretionary services need to be reduced or stopped altogether.
We are committed to understanding the full impact of our decisions and mitigating the risks wherever possible. This will include robust Equality Impact Assessment and thorough consultation on any major changes. We will take account of all the feedback we receive and make the most informed decisions we are able to with the resources we have.
How many jobs will be lost?
We cannot be precise at this stage but clearly we cannot make the savings we need to and stop or reduce services without becoming smaller organisation. We are looking at a reduction of around 300 posts from the council. Some proposals will need consultation with staff and the public and may change after this. We will also be exploring how services that are reducing or ceasing can be differently funded, continue outside of council control or other ways that help reduce the impact for local people as far as possible. This may impact on this number. Wherever possible we will be doing all we can avoid compulsory redundancies.
What is the difference between capital and revenue budgets?
Lezley Picton, the leader of Shropshire Council, 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 we can no longer afford such as some libraries or leisure centres
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
What are the plans for Household Recycling Centres?
A proposal to close two of our five recycling centres to help the council make £62m of savings has been agreed by Councillors.
However, no decisions have been made and no sites have been identified for closure. Any decision would only be made following extensive research, discussions with our waste contractor Veolia - who operate our five recycling centres - and a public consultation. Any decision would then have to be agreed by Cabinet and Full Council.
If we can find another way to make the required savings without closing recycling centres, we will consider this.
What are the plans for the Guildhall in Shrewsbury Town Centre?
Guildhall in Shrewsbury is currently occupied and used by University Centre Shrewsbury (UCS) and has been since 2016.
During the first five years, we had an agreement in place which allowed them to use the building free of charge. However, this period was extended due to the pandemic and the subsequent impact this has had on student numbers.
We have supported UCS through the years and have had regular conversations with them about their future plans. Unfortunately, during our latest conversations they were unable to give us an assurance in respect of meeting future rental liabilities and, as many will understand, we just cannot continue to support them in this way.
We're speaking with them about alternative accommodation plans and we will help them to review their options to support teaching and learning within the town.
What are the plans for Shirehall?
Shirehall is expensive to run and maintain, and it’s also too big for our needs now and in the future.
Moving out of Shirehall has been our aim for a long time, but the need to reduce our spend means that our move will be quicker.
The creation of a multi-agency hub in Shrewsbury town centre, as part of the exciting redevelopment of Smithfield Riverside, is still our future plan. We will however need a base within the town centre before the multi-agency hub is completed. We’re currently exploring the buildings that may be suitable for our occupation and this includes Guildhall.
What are the plans for the School Library Service?
In Shropshire, the School Library Service (SLS) operates as a traded service, which schools can buy into, and around 65% of schools in Shropshire choose to do so. Schools that subscribe to the service can borrow books and artefacts relating to school topics and receive training for staff and pupil librarians. Schools can use the service to supplement their own stocks of books and resources.
The service has been operating at a loss for the last two financial years and we no longer have the reserves to fund this. Any future service, if retained, would require more schools to subscribe to the service and to pay more to do so.
Shropshire, like many other councils, faces a very challenging financial position, and we must find £62m of savings this year. This is due to ever rising demand for social care, which now accounts for almost £4 in every £5 we spend, and rising costs from continuing high levels of inflation.
This means that we now have some very difficult decisions to make, including reducing some services, particularly non-statutory ones. In some cases, this means stopping services altogether.
Schools have been invited to respond to a consultation to share ideas, including whether they would be willing to pay more for the service, or start using the service if they don’t already, to make it financially viable for the future.
We're also inviting members of the public to share their feedback on the proposals.
All possible options to continue the service will be explored and we welcome all possible solutions.
To share feedback as a member of the public, visit our 'Get Involved' page.