He lost his Hanwood and Longden seat to independent councillor Yvonne Holyoak.
The leading Conservatives gained just one seat while Labour held their three seats in the first results declared in Shropshire.
A third of the council's 40 seats were elected.
Before the election in Telford and Wrekin, the Conservatives said they was investigating the fact that Mr Ashcroft had been a member of the National Front.
There were calls for him to step down despite him declaring he was ashamed of his past and now condemned racism.
Oswestry had been in no overall control before the Conservatives' triumph on Friday. They gained two seats, while the Lib Dems and Labour lost one each.
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