Damning report urges ‘urgent’ sale of Shropshire’s Shirehall
A gloomy report into finances at beleaguered Shropshire Council has warned that “radical options” may be required in order to improve the local authority’s cash problems.
The study by public-sector finance body CIPFA into the financial position in Shropshire has urged the council to complete a sale on its vacant and decommissioned Shirehall building in Shrewsbury as soon as possible, one of a number of recommendations in the report.
The Ministry for Housing, Communities and Local Government tasked CIPFA with taking a deeper look into Shropshire’s finances following a £219m emergency funding bailout issued earlier this year.
A report published this week has concluded that the authority is in “extremely poor financial health”, concluding that there was “minimal likelihood” that the council will be able to extricate itself from its perilous financial situation within the next few years.
While news that the authority’s finances are in a poor state will pose few surprises, the findings have laid bare mismanagement issues spanning back further than a decade.
A decision by the then Conservative-led administration to freeze council tax between 2010 and 2016 led to increased pressure on strained budgets, and a “poorly executed” restructure of the workforce carried out in 2024 removed more than 200 posts without a clear plan for how the council would operate in future – leaving it short in critical areas such as financial forecasting.
The report praised an improvement in culture and working practices since September last year, following the resignation of previous chief executive Andy Begley.
But the body warned that much more needed to be done to correct the council’s course, including an expedited sell-off of the vacant Shirehall building after several years of equivocation.
“The proposed sale of Shirehall is a significant component of the forecast [capital] receipts in 2026-27, but its timing is now at risk of delay because the cabinet has commissioned a feasibility study for potential redevelopment of the building,” the report noted.
No more cash for Cornovii
The report added that the council could not afford to further fund development activities for its private-sector house building arm, Cornovii Developments, leaving it facing a potentially uncertain future.
The firm has around £25.8m of assets, which are mostly in development, and the firm is “largely dependent” on loans from the authority to fund its purchases.
Papers put before the council’s cabinet in April showed Cornovii has spent £33.8m of a £69m loan facility from Shropshire Council, returning just £24m to council coffers so far.
Cornovii is currently involved in two future schemes in the county, an 89-home development in Oswestry with outline permission secured, while a decision on a joint proposal with David Wilson Homes and Barratt for 283 homes in Bicton Heath is still pending.
‘Foundations are in place’ to fix historical errors
A total of 22 recommendations were made by the body, including potentially working with another local authority to reduce its dependency on key individuals in the council’s finance team, a situation created by the 2024 restructure.
In a response issued this week, Shropshire Council said the findings related to “previous financial management arrangements” and leadership issues, and says it has plans in place to tackle the 22 recommendations made in the report.
“The report acknowledges that we have started to put in place the right foundations through our Improvement Plan, strengthened leadership and a renewed focus on capacity, capability and delivery,” said council leader, Cllr Heather Kidd.
“At the same time, we are under no illusion about the scale of the challenge we face. The report reflects many of the issues we already know about and reinforces the need to maintain momentum.
“We have made significant progress in a short space of time, but there is much more to do. We remain committed to delivering the improvements needed, strengthening our financial sustainability and ensuring that local people receive the services they rely upon in the years ahead.”
The full report is available on the government website via the MHCLG.
