Council calls for ‘fairer funding’ in face of ‘unprecedented’ money challenges

Leaders of Oldham council have called for the new government to introduce ‘fairer funding’ for local authorities.

Councillors discussed the ‘severity’ of the borough’s financial situation at a cabinet meeting on August 19. 

The council spent £6.5m more than budgeted in the last three months, leaving it with a projected overspend of £26m. 

Speaking at the meeting, the council’s finance boss Abdul Jabbar said the amount would be “unprecedented” for the council.

He noted that £3.5m of the council’s overspend was in children’s services, £1.4m in adult social care and £1.2m in strategic housing. 

Jabbar said: “We’re not alone in seeing significant pressure in those areas.

"If you look at most of the Greater Manchester authorities, they are facing similar pressures. 

“I think this has happened because for a number of years the previous government didn’t give local authorities the right level of resources in areas where there was growing demand.

"We’re seeing the consequences of that. 

“I hope a new government will look into this and give us the right resources.”

He emphasised that the council ’were not waiting for government’ and are already working to bring down the projected overspend by “freezing all vacancies” and “freezing spend” except for in essential areas. 

Council leader Arooj Shah noted the work that was already being done but also voiced her hope that the new Labour government would introduce a different funding system. 

Shah said: “The pressures on these services will continue no matter what we try to do up until we have a fairer funding formula.”

She added that she was ‘relieved to have people in those departments [in government] who would understand and support the challenges faced by local governments’. 

In a previous interview with the LDRS, Shah explained that ‘fair funding’ would ‘match resources to level of need’ and remove ‘stringent and unrealistic criteria’ attached to certain pots of money.

Other sources in the council have suggested that MPs and members of council were “lobbying like crazy” to garner support from parliament for local authorities. 

The Department for Levelling Up, Housing and Communities has promised to help “get councils back on their feet … through multi-year funding settlements, ending competitive bidding for pots of money and reforming the local audit system.”

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