‘We will make sure we don’t go bankrupt’

Oldham Council has managed to bring down a huge projected funding gap - but still faces a £21m overspend.

The update was issued at a council meeting on Wednesday evening (September 11), where the council’s finance boss Abdul Jabbar was grilled on the state of Oldham’s accounts.

The council was initially facing a £26m budget hole and has asked staff to consider voluntary redundancies and reduced contracts.

This came in top of an £11m gap the local authority is still trying to plug from last year’s budget.

Coun Jabbar told the council: “Clearly, we’re in a very challenging situation and we’re dealing with it head on.

“I’m pleased to say that the measures that we’ve undertaken has reduced the projected overspend from 26 to just over 21 million.

"I’m confident over the year that number will come down.”

He later added: “We care about the people of Oldham.

"We will make sure that we manage the finances of Oldham so we don’t go bankrupt.”

He suggested the council’s digitalisation efforts have played a role in bringing the figure down.

The council is facing finance troubles as the demand for and costs of adult and children’s social care and temporary accommodation continues to rise.

The issues are faced by many local authorities across the UK, with Manchester and Salford councils recently declaring they were looking at possible overspends of £17.5m and £6.8m respectively.

Asked why the finance boss hadn’t factored in the rise in demand for this year’s budget, Jabbar responded: “It’s not just an issue of rising demand but also a rapid increase in prices driven by the external market.

“But while the private sector is making millions of pounds from placements, council budgets have been starved over the last 14 years.

“We’re not alone in this. This is a problem nationwide.

"It’s very, very hard to predict exactly what will happen because it’s very volatile.”

He claimed the council had ‘lost’ 200 million pounds since the Conservatives came to power in 2010.

With rising council tax, Oldham has increased its spending power by 15.5 percent – significantly below the national average of 26.9pc, according to Jabbar.

The councillor went on to claim that if the local authority funding scheme was a ‘level playing field’ and Oldham kept up with the national average, the borough would be getting £26.3m more a year – enough to cover the predicted overspend.

But opposition councillors said they saw ‘the risk of a section 114 hanging over the council’.

Conservative councillor Lewis Quigg said: “What was presented in the budget wasn’t necessarily worth the paper it was printed on because it seems we’ve gone over budget on various items.

"This seems to occur year after year.”

He called for a forensic accountant to inspect the council’s accounts, but was outvoted in the council chambers.

---

Do you have a story for us? Want to tell us about something going on in and around Oldham? Let us know by emailing news@oldham-chronicle.co.uk , calling our Oldham-based newsroom on 0161 633 2121 , tweeting us @oldhamchronicle or messaging us through our Facebook page. All contact will be treated in confidence.