Shropshire Council leaders have revealed they considered issuing a ‘section 114 notice’ – to effectively declare the authority bankrupt – but decided they could not “throw in the towel”.

Senior councillors made the admission in the wake of Birmingham City Council issuing a 114 notice earlier this week, with several others also on the brink of financial collapse.

But the council’s Conservative administration said it had instead taken the tougher option of committing to a whole-scale overhaul of how services are delivered, in order to make savings of £51.4 million in the current financial year.

Speaking at a meeting of the council’s cabinet, Councillor Gwilym Butler, portfolio holder for finance, said he wanted to “give reassurance” on the state of the council’s finances.

He welcomed a report from finance director James Walton which said the position at the end of the first quarter of 2023/24 was positive, with two-thirds of the planned savings target either already delivered or on track to be delivered.

Councillor Butler said: “The first quarter has exceeded our expectations, and officers have worked tirelessly. However, we cannot be complacent – there is much to do.”

He said he wanted to make clear the council was not facing an “imminent financial crisis” – and any claims to the contrary from opposition councillors were “misleading and politically charged”.

Councillor Butler added: “My firm, determined aim is to continue safe financial control of Shropshire Council.

“The team is in control and we will continue to deliver for our residents and transform into a modern, efficient and sustainable council for the future.”

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Councillor Chris Schofield, portfolio holder for planning and regulatory services, said he “felt sorry” for staff whose morale was affected by concerning claims made by members from other parties.

He said: “I think the opposition leaders may do themselves a favour and retract the statements they have made about Shropshire Council going bankrupt.

“And when it comes to Birmingham, I don’t think we should take any lessons from the Labour opposition leaders in this council chamber quite frankly.”

Council leader Lezley Picton said there was a key difference between Shropshire and the councils which are issuing or considering a section 114 notice.

She said: “The difference is we have a plan and we are working on that plan.

“What I saw at Stoke is really disappointing. I saw a Conservative administration with a plan, in the same way that we have, and the Labour administration there has been in for 100 days and has thrown in the towel because it’s just too tough.

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“This is tough, this is difficult, but if we don’t do this, what’s going to happen in Birmingham, and in Stoke and in Suffolk, if they call a 114, will be catastrophic.

“We could have done that, we could have sat back and said, ‘no, it’s too difficult, let’s just call a 114’.”

Councillor Butler interjected: “And to be truthful we had that conversation.”

Councillor Picton said: “We did have that conversation.

“But we have a plan, and it’s tough. The staff are working so hard to achieve this plan, they don’t need to see bunnies running all over the place from inappropriate political statements.”