Report forecasts possible £20.8m budget hole in council finances

Town hall bosses in Oldham are facing a possible £20m budget hole, a report has confirmed. 

Based on the council’s current spending, the local authority could face a £20.822m deficit by the end of the financial year.

Council officers issued an ‘early warning’ in a report brought in front of a cabinet meeting yesterday (Monday, September 22). 

Councillor Abdul Jabbar, Cabinet Member for Finance, Corporate Services and Sustainability, said: “It is a significant amount of overspend.

"We have been looking at this and taking all kind of action to make sure that we manage it and hopefully get rid of it in its totality. 

“It is very difficult because of the pressures we’ve been feeling in adult social care, children’s services, and temporary accommodation.

"But we’re working very, very hard to look at this forensically and see what we can do.” 

The forecasts estimate that Adult Social Care will be £10m over budget, Children’s Services will be £5m over and ‘Place’, the department in charge of temporary accommodation, will be almost £6m over by the end of the year. 

In previous years the local authority has relied on their ‘rainy day’ fund to plug spending gaps.

But with reserves now down to £24.5m, the local authority is approaching a tight squeeze for their future budgets. 

An officer noted in the financial report: “Every effort must be made to reduce the forecast variance by the year end to mitigate any potential impact on the 2026/27 budget.”

While townhall boss coun Arooj Shah acknowledged the report, she objected to some of the language used in the review – which she claimed ‘gives the public the wrong idea’. 

The town hall leader has previously spoken out about how historic underfunding has disproportionately affected boroughs with higher levels of deprivation such as Oldham, who have to foot higher bills to deal with homelessness and social services. 

The government has declared it will change the way councils are funded from 2026/27, with more money for social care and support for areas with high levels of deprivation.

However the exact allocations for Oldham are yet to be revealed.

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