Shropshire Council warns it could face bankruptcy over cancelled £215m relief road
Council may need to borrow up to £100m and could be forced to repay a £54.4m government grant after spending £39m on a scheme that was never built
Shropshire Council has warned it could face bankruptcy after scrapping a planned £215 million North West Relief Road around Shrewsbury, with a report saying the authority may need to borrow up to £100 million to avoid running out of cash by April 2026.
The council says it has already spent about £39 million on the scheme, including nearly £21.9 million on consultants and almost £8 million on pre-construction contracts. The Department for Transport (DfT) provided a grant for the project in 2019 worth up to £54.4 million; the council says it would have to find tens of millions of pounds if the department seeks repayment.
Liberal Democrat council leader Heather Kidd told the BBC that repaying the DfT grant would "tip the council over the edge" and said the authority was likely to approach the government for further support as it attempts to balance its books. The new administration pulled the plug on the four-mile (2.5km) bypass in the summer, saying it could no longer afford the scheme.
The relief road was first proposed by the previous Conservative administration as a measure to reduce congestion and pollution in Shrewsbury town centre. Initial cost estimates put construction at about £87.2 million, but the figure rose to an estimated £215 million before the project was cancelled.
A programme of "enablement works" had started under the previous council. The report sets out spending of £21.875 million on designer-engineer consultant fees and £7.975 million on pre-construction contracts, part of the £39 million total already incurred.
The DfT has told the council it would not award any more money than originally allocated to the project. The report warns that one of the largest threats to the authority's financial security is the funding tied to the now-cancelled scheme.
Shropshire Council was among 29 councils that received Exceptional Financial Support last winter, a package that totalled about £1.5 billion across the authorities granted aid. The council says an independently chaired "improvement board" is being established to scrutinise spending and governance before it decides whether to seek further government assistance. The council aims to have that board in place by a meeting of council leaders scheduled for Oct. 15.
Opposition parties and environmental groups strongly opposed the relief road, in part because it would have required the felling of a 550-year-old oak tree known locally as the Darwin Oak. A petition to save the tree, associated with Charles Darwin because his home was nearby, attracted more than 100,000 signatures.
Campaign group Better Shrewsbury Transport (BeST), which had long opposed the scheme, has written to council leaders calling for a "full and thorough" inquiry into how the project reached the stage that left the council liable for significant sums despite its cancellation. Mike Streetly of BeST said people across the county were "furious" and questioned how £39 million had been spent.
The council report and subsequent statements lay out a constrained set of options: seek additional central government support, borrow against future budgets to cover potential grant repayments and existing commitments, or make further savings elsewhere in council services. Council leaders have stressed that decisions will be taken against the backdrop of statutory duties to provide key services.
An independent inquiry has been demanded by campaigners and some local politicians to establish how cost forecasts rose and whether procurement and contract management were handled appropriately. The improvement board, intended to be independently chaired, will review governance arrangements and spending controls while any further requests for financial aid are considered.
The North West Relief Road episode in Shropshire highlights wider pressures on local government finances, where rising project costs, contractual commitments and constrained budgets have led several councils to seek central government intervention in recent years. For Shropshire, the immediate fiscal deadline is April 2026, when the council projects it may otherwise run out of money without borrowing or fresh funding.
Council officials say they will provide further updates to councillors and residents as the improvement board is established and as they clarify the final accounting on costs and potential grant liabilities. Campaigners and opposition councillors say lessons must be learned and have urged transparency over decisions taken under the previous administration.