Shropshire Council spends over £554m every year delivering services to our local communities. We spend most of our budget on adults and children’s social care, protecting more vulnerable people in ever more complex and, by necessity, expensive ways. These are services that 97% of the population of Shropshire don't access directly, yet they are growing in cost at a faster rate than any other areas.

Government funding for services has reduced year on year at the same time that our costs are increasing. We can raise more income from council tax, but this can only go so far. We must set a balanced budget in law and so we have little choice other than to raise income from other sources, cut our costs elsewhere, or both. This means asking our communities to pay more in council tax, more in fees and charges, and receive less in services as available funding is redirected to those vital areas most in need – adults and children’s social care.

Further cuts to existing budgets are becoming increasingly difficult, and we'll continue to look at other ways to deliver income into the council to put us on a more sustainable funding position. We'd like your views on proposals being taken forward for the 2022/23 financial year so that we can take account of the taxpayers’ views on these proposals.

(Please note: in this exercise we're seeking views on the overall scale and direction of the proposals rather than the detail underpinning them. Where any savings proposals would impact directly on an individual, specific consultation would take place as part of a future implementation plan).

But first, before we dive into the detail, it's important that everyone understands some background information on our financial position.

We have two main types of funding - revenue funding and capital funding:

• Revenue funding pays for the services referred to above and consists of revenue support grant, council tax, business rates, other specific government grants, and income. These funds can be used to support day to day services including adults and children’s social care, waste collection and disposal, highways maintenance and cultural and leisure services
• Capital funding, on the other hand, includes capital grants, capital receipts from sales of assets, other contributions and borrowing. This funding may only be used for capital projects and can't be used to support our day to day running budget. So, to deal with one common misunderstanding first: it's illegal for us to borrow money to pay for revenue costs. Unlike the government, we can't borrow money to pay for day-to-day services.

The main pressure on council budgets is within the revenue budget, so we're trying to think how we can use the capital budget to develop some large-scale schemes that will deliver added income or reduced costs for us. This approach enables us to spend capital money, or even borrow money, to deliver defined schemes that will reduce our running costs or generate income. This should then relieve the pressure on the revenue budget and reduce the pressure on delivering further savings in service areas.

In terms of funding, the main area that we have control over is setting the council tax level for the next year. For 2022/23 we're proposing a 3.99% increase overall (a 1.99% general increase and a 2% ‘precept’ increase that's used specifically to fund the growing costs in social care. This is the maximum that we can raise through council tax in this year.

We're obliged to provide certain statutory services. These include adults and children’s safeguarding and social care, waste collection and disposal, and home to school transport for children aged 5-16. Whilst we aim to deliver these services as efficiently as possible, we must fund any increase in demand. Together these services make up almost 80% of our net revenue budget.

The need to fund these services increases the pressure on other areas of the council (those areas considered discretionary), so we're looking to find other ways to bring new or added income in to support discretionary services where possible. This may be through capital investments, through new income opportunities or through joint commissioning of services. We look for these opportunities before considering cuts in services.

We're planning to deliver savings of £10.555m in 2022/23, and £4.469m of these are savings which had been agreed for 2022/23 in previous years' financial strategies. The remaining £6.086m of these savings for 2022/23 are new proposals that have been established in order to help balance the 2022/23 budget.

These savings aren't enough to close the full funding gap that we have in 2022/23, and we plan to use one-off grants from the government to balance the books, as well as using our remaining reserves that we've set aside for this purpose. A significant funding gap will remain in the budget the following year, 2023/24, and given that the government has only provided a one-year funding settlement to local authorities for 2022/23 it's not known whether one-off grants will be available to partially offset the funding gap arising in future years. This position is summarised in the table below:

The funding mechanism for local government had been expected to change in 2022/23, bringing with it a much closer alignment of funding with the costs of social care, although the government has delayed this change for a number of years. It's not clear when this will now be implemented, which makes long-term financial planning extremely difficult for the authority.

We want your help in confirming that our budget plans are appropriate in terms of the council tax rises proposed and the headline savings suggested. To have your say, simply click on the 'How to get involved' tab on this page to access a quick survey. The closing date for comments to be received by us is Wednesday 16 February 2022.

Your thoughts will be considered by full council when they discuss and agree on the final budget on Thursday 24 February 2022.

You can also respond to this engagement survey in writing:

• Email: TellUs@shropshire.gov.uk
• Post: Feedback and Insight Team, Shropshire Council, Shirehall, Abbey Foregate, Shropshire SY2 6ND

If you'd like the survey in an alternative format, please email TellUs@shropshire.gov.uk and describe the support you need to allow you to respond.

Your views will form part of a report which will be considered by full council when they discuss and agree on the final budget.