SHROPSHIRE Council's Cabinet member for finance says the authority is facing a 'tough outlook', blaming the cost-of-living crisis and rising energy costs for an £11 million overspend.

Councillor Gwilym Butler, Shropshire Council’s Cabinet member for finance and corporate resources, was speaking as the authority highlighted the overspend was the equivalent of five per cent of its budget for 2023-24.

Cllr Butler insisted that without the rising inflation in the UK, Shropshire Council would be able to deliver a 'largely-balanced' budget but a report ahead of Cabinet meeting next week says money would have to come from a 'dwindling' general fund.

And the authority could consider a five per cent council tax rise after the autumn statement allowed for an extra one per cent without a referendum.

Cllr Butler said: "In the last few days we are seeing many more councils reporting very similar challenges to the ones we face, particularly around social care costs.

"The Local Government Association has said that councils would need to raise council tax by 20 per cent the next two years just to meet current cost pressures.

“The autumn budget statement may bring some limited support for social care and we wait for the detail of what this means for us when we receive our settlement in late December and any proposals on council tax will come forward in early December.

“However, overall the picture is of a very tough financial outlook for the council with a significant longer term funding gap.

“We are working very hard to reduce any in-year overspend further and we have a clear medium term plan to be financially sustainable, set by the priorities in the Shropshire Plan, but this will involve very difficult decisions.

“Strip out the impact of inflation and we would now be looking at a largely balanced budget this year.”

Shropshire Council says that growing demand for services and children’s social care and safeguarding are among the main reasons for the overspend.

The latest quarterly monitoring report shows the council’s position halfway through the financial year and it is now working very hard to reduce this figure.

A council spokesman added: "Inflation now running at 11 per cent is adding further costs to council services while extra demand for many services is increasing, for example as more people need help from the council with the cost of living.

"Key areas of pressure are growing costs in children’s social care in particular.

"The council is working hard to reduce the in-year overspend figure.

"For example, it is reducing the number of homeless people housed in costly temporary B&B accommodation by finding permanent housing and will bring this to zero by the end of March 2023.

"It is also reducing the number of looked after children in expensive residential care and finding them placements with families. In both these examples, the outcome is better for those involved."

The council says it has a longer-term financial plan to ensure that it can close a £27.5m funding gap it is expected to face by 2028.