Oldham council faces a significant financial challenge, needing to bridge a budget gap of £22 million over the next two fiscal years. The authority's budget deficit will require service cuts and potential impacts on residents.
Oldham council faces a significant financial challenge, needing to bridge a budget gap of £22 million over the next two fiscal years. The authority's budget deficit for 2024/25 currently stands at £14 million, a £5 million improvement from the initial £19 million projected deficit thanks to government funding. However, a further £8 million in service cuts will be required to balance the books for 2025/26.
Councillor Abdul Jabbar, Cabinet Member for Value for Money and Sustainability, acknowledged the government's support but stressed that it only partially addresses the financial pressures faced by the council. The projected debt is largely attributed to rising demands on essential services such as children's services, adult social care, and housing for the homeless, which the council is legally obligated to provide. For instance, the number of people in temporary accommodation has increased from 652 in July 2024 to 727 in December, contributing to a predicted £5.8 million overspend.Council leader, Cllr Arooj Shah, highlighted that Oldham bears a disproportionate burden of social needs compared to other areas, resulting in a greater impact from the past 14 years of austerity measures. She emphasized that the funding received from the previous government was insufficient to meet the demands placed upon council services, particularly in adult and children's social care. To address the current £14 million gap, the council plans to utilize its reserves, the borough's 'rainy day fund', reducing available reserves to £26 million. This leaves the council with significantly less financial resilience as it is advised to maintain at least £30 million in reserves. The budget report indicates that by transferring approximately £4 million into the reserves next year, the council aims to restore some balance. The £8 million gap for the coming financial year will necessitate cuts to the budget, potentially impacting the services provided by the council. Precise details of the cuts remain to be determined. The council has urged the public to participate in the decision-making process through a consultation open until February 8, asking residents 'Where do you think the council should save money?'Future government support remains uncertain. While Oldham council will receive an additional £23 million in spending power next fiscal year due to a government settlement, along with a net increase of £13 million in grants, the full details of the 'Final Local Government Finance Settlement' will be confirmed in February. This one-year settlement scheme for local authorities leaves the council unable to fully factor it into their planning at this stage
BUDGET DEFICIT SERVICE CUTS LOCAL GOVERNMENT FINANCIAL PRESSURES OLDHAM COUNCIL
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