Grant Thornton makes two statutory recommendations after reserves fell from £34.3m to £5m. Councillors must respond at a special meeting on 5 November.
Shropshire Council’s auditor has used its legal powers for the second year running, after the council’s general reserve fell from £34.28m to £5m in a single year.
Grant Thornton’s report on 2025/26 makes two statutory recommendations, one on money and one on governance. Under the Local Audit and Accountability Act 2014 the council has to consider them in public within a month. A special meeting of full council has been called for 9am on Thursday 5 November at the Guildhall in Shrewsbury.
The council published the report on its committee pages and announced it in a newsroom release on 28 October.
What the auditor found
Grant Thornton found nine significant weaknesses in how the council secures value for money, and makes 12 recommendations: two statutory, seven “key” and three for improvement. The report itself sets out the figures behind them:
- the council overspent its £288.59m net budget by £49.43m in 2025/26
- adult social care and children’s services made up 62% of that overspend
- it planned to save £59.87m and delivered £17.72m, or 29%; £33.38m of savings were not achieved
- the general fund balance fell from £34.28m on 31 March 2025 to £5m on 31 March 2026
- net borrowing was £465m in February 2026 and is forecast to reach £959m by 2028/29
- the deficit on the schools grant for special needs rose from £17.65m to £45.66m
The auditor says the £5m left in reserve gives the council “very limited reserves to respond to unforeseen financial pressures or emergencies”. In July the Cabinet agreed to rebuild reserves by £5m a year.
The two statutory recommendations
The first is about money. The report says the 2025/26 budget was “poorly constructed”, did not reflect demand for services and had no deliverable savings plans for key services. A voluntary redundancy programme was not budgeted for. Grant Thornton now sets the council a deadline: significant progress on financial recovery by March 2028, and full recovery by March 2029. The stated goal is for the government’s Best Value Notice to be withdrawn.
The second is about governance. The report says the council “must get an urgent grip on its corporate governance”. Its own Head of Policy and Governance has given a “Limited Assurance” opinion on the council’s control environment for the seventh year in a row. Risk management was itself a significant weakness in 2025/26, and an internal audit of budget monitoring was rated unsatisfactory in February. The recommendation asks for:
- faster action on internal audit recommendations
- a redesigned risk management framework, with a published strategy
- better budget monitoring and financial reporting, embedded across the council
- enough staff capacity to meet its Best Value duties
- regular progress reports to councillors, the Improvement Board and the government
Last year’s single statutory recommendation, reported to council in December 2025, was on financial sustainability. The finance director’s covering report says the two new ones replace it.
The bailout, year by year
Shropshire Council relies on exceptional financial support from the government: permission to borrow or sell assets to pay day-to-day costs. The government approved up to £71m for 2025/26, and the council used £61.9m. For 2026/27 it approved £121m, but the council’s own revised forecast in July cut the need to £87m.
The forecasts beyond that keep rising. The report puts the likely need at £99m in 2027/28, within a range of £82m to £125m, and £121m in 2028/29.
Against those gaps, the July plan held new savings of only £5m to £10m for 2027/28. The auditor notes the rest were “yet to be identified”.
What the report says is going well
The report is not all criticism. Grant Thornton says 2025/26 ended with “early signs of recovery”, and credits:
- the appointment of the chief executive, now permanent, and an interim finance director
- the independently chaired Improvement Board
- a Good rating from the Care Quality Commission for adult social care
- an Outstanding Ofsted judgement for children’s services
It expects to sign off the council’s 2025/26 accounts with an unqualified opinion in November. Its detailed findings go to the Audit and Governance Committee on 26 November. The auditor also notes the council published its draft accounts on time but missed the deadline for its Annual Governance Statement, which followed in July.
What the council says
Councillor Heather Kidd, the council’s leader, said the report “sets out serious findings and recommendations”. She said it “largely reflects the council’s position during 2025/26, under a budget set by the previous administration”.
“Reducing our reliance on EFS is one of the biggest challenges we face and will take sustained discipline, difficult decisions and transformation across the council,” she said.
The council says it will fold the auditor’s recommendations into a refreshed Improvement Plan, which goes to Cabinet in December.
What it means for you
- Council tax. Shropshire Council’s share of this year’s bill rose by 8.99%, above the usual cap, with government permission. The report does not set next year’s figure, but a £99m forecast gap leaves little room. Our council tax bands page has this year’s charges.
- Services. The report links most of the overspend to adult social care and children’s services, where demand is highest. Savings of the size still missing would have to come from somewhere.
- The meeting is public. Full council meets at 9am on 5 November in the Council Chamber at the Guildhall, Frankwell Quay. The agenda and both reports are on the committee page.
Our earlier reports cover the government-ordered CIPFA review in August and the special needs deficit.
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