Cash-strapped Shropshire plans extra £37m sales
Plans to accelerate land and property sales across Shropshire Council’s £500m estate will go before councillors this week, as the authority battles to balance its books in the wake of a ‘disappointing’ financial settlement from central government.
The council is considering a further £37m of sales on top of an already agreed programme of almost £50m, with around £26m forecast for sales in the 26/27 financial year alone, as part of an overall review of all council owned and leased assets.
A review of the council’s capital strategy is due to be approved by cabinet this week, a move which will also see several capital spending projects shelved – including the county’s flagship Riverside town centre regeneration scheme and a £29m swimming pool expansion planned for Shrewsbury.
Instead, it plans to prioritise “income generating” projects, as well as schemes which generate capital receipts.
Shropshire Council currently owns around 450 individual properties or land assets, including its former Shirehall offices, which look set to be demolished to make way for a residential-led redevelopment scheme.
The authority is currently looking to bridge a funding gap of around £15m, with a forecast overspend of just over £50m set to wipe out the authority’s entire general reserves balance of around £35m this year.
Shropshire Council applied for emergency financial support from the government last month in a bid to stave off issuing a Section 114 notice, a measure which would effectively mean declaring itself bankrupt.
In a statement, council leader Heather Kidd said the Capital Plan, alongside a Medium Term Financial Strategy also due to be approved this week, outlined the “significant financial challenges” facing the council.
“While our spend on capital projects comes from our capital budget – money which can only be spent on big, one-off projects that create or improve assets and infrastructure, rather than funding the delivery of services – we still need to think carefully about how we spend it and whether it’s right to borrow more now which will put further pressure on our budgets. Those capital projects which bring in an income will remain a priority for us,” she said.
“We were extremely disappointed with the government’s recent funding announcement, the news of which we received just before Christmas. The initial figures we’ve been given will leave us with less money and make it even harder to provide essential services.
“We remain committed to standing up for Shropshire and are urging the government to reconsider these plans before they cause serious harm to our local communities. We expect our final settlement to be announced early next month. Right now, this policy places the burden of national decisions onto local councils, forcing us to raise Council Tax just to keep essential services running.”
Recommendations on the council’s future capital strategy will be discussed on Wednesday, 21 January at a meeting of the council’s cabinet.
