By Mike Sheridan, local democracy reporter

COUNCIL tax in Shropshire is set to rise in the next budget, following a lower-than-expected settlement from central government.

On December 18, ministers announced councils would be able to spend 6.5 per cent more next year as a result of funding from the UK Government.

But council bosses say the figures would include a near five per cent hike in council tax – and even with the proposed increase, demand for services at authorities across the country is set to outstrip available resources.

Shropshire Council’s cabinet member for finance, Gwilym Butler said: “This is not a situation restricted to Shropshire, this affects every council and I will be joining with other council leaders and asking our MPs to impress upon the Government the difficulties that local government faces.

“We are still working through the detail but the reality is that overall this settlement falls well short of the level of support that we need to address the problems that we are facing, in relation to inflation and increases in the national living wage, as well as the specific challenges in areas such as adult social care, children’s services, SEND and SEND transport and housing and homelessness.”

Shropshire Council says it has already delivered over £40m of savings from its current year budget, but that demand for statutory services would continue to grow “at pace.”

“There is no doubt that we will have to find more ways to reduce costs and inevitably this will mean making reductions to valued local services whilst having to raise council tax to the maximum,” he added.

Councillor Shaun Davies, leader of Telford and Wrekin Council and chair of the Local Government Association, said the settlement would not provide enough funding to meet the “severe cost and demand pressures” faced by councils in the next financial year. 

“Councils in England continue to face a funding gap of £4 billion over the next two years as today’s announcement does not change the funding gap facing councils this year and next,” he said.

“The Government urgently needs to address the growing financial crisis facing councils and come up with a long-term plan to sufficiently fund local services through multi-year settlements.”

The Government said it was providing £1 billion in additional grant funding for social care compared to 2023-2024.

“We are, and will, continue to work alongside councils to ensure quality and reliable services are provided to those who need and use them, while also keeping a weather eye on ensuring value for the taxpayer,” said Minister for Local Government Simon Hoare.

Full details of the final local government finance settlement will be released in early 2024.