Budget approved with 5pc tax hike and £8m cuts

Oldham is done with ‘short-term fire fighting’ its finances, according to council leaders – but tax in the borough will rise by 4.99 per cent.

The increase was approved by full council yesterday (March 4), along with £8m in cuts and an average 10 per cent on all service fees. The budget had to plug a £20m budget gap caused by spiralling costs in adult social care, children’s services, and emergency homeless accommodation. 

Changes to the way government funds local authorities has created ‘more stability’ by introducing three-year settlements and increased Oldham’s budget by around £19m, council bosses said. But the borough still has a way to go before it is in the green. 

“We can finally focus on long-term change and not short-term fire fighting,” said town hall leader Cllr Arooj Shah. “That stability shifts everything in this budget. 

“But this is also a serious grown up budget. It includes a five percent council tax rise. … Not raising council tax creates a gap in the budget of millions of pounds year on year that destabilises our finances. This would mean we would not be able to provide services that our most vulnerable residents need and rely on. 

“It’s a reality that many councils will go above five per cent this year because they have failed to plan ahead in previous years. Thankfully Oldham is not one of those places.” 

The price hike will see those living in Band A properties charged close to £1,717 – an increase of around £82; £2003 a year for Band B (£95 increase); and £2289 for Band C (£109 increase).

Those in Saddleworth and Shaw & Crompton will be charged a slightly higher rate including their parish council taxes.

The borough has for many years faced ‘a perfect storm’ of rising demand for the most expensive services, inadequate funding settlements, and soaring inflation, according to finance boss Cllr Abdul Jabbar. The Deputy Leader and Cabinet Member for Finance, Corporate Services and Sustainability explained that changes to government policy meant councils are effectively left with ‘no choice’ but to raise council tax. 

Cllr Jabbar said: “No Labour councillor wants to increase tax. However, for too long councils with lower needs and higher incomes could keep council tax low while places like Oldham had to raise it simply to maintain services. 

“But now the government have made it clear: the level of local taxation is taken into account when allocating funding from government. Councils that fail to raise council tax income will be punished.”  

The 2026/27 budget is the second year in a row that Oldham has not resorted to using its general reserves – the council’s ‘rainy day’ funds – to plug its budget gap, unlike many other local authorities in the region. There are plans to increase the current reserves to £72m in coming years, increasing the total amount by a third. 

The council will also invest £12m each in adult and children’s social care, and increase spending on road maintenance across the borough. Other changes include introducing an in-house waste management service for bulky items at £10 a piece, and creating a rapid action task force to tackle the borough’s endemic fly-tipping problem. 

But fees on almost 900 services are also going up an average of 10 per cent, including charges on parking, graves, leisure centres, and wedding registry costs. 

Around £8m in cuts include axing up to 13 managerial positions worth around £1.3m as well as £1m worth of savings in temporary accommodation. 
Plans to shut down an adult day care centre at Chadderton Hall Park were scrapped, however, after families and the local press put pressure on the council to save the service. 

While the budget passed with a majority vote, the Liberal Democrat group put forward an amendment to the motion and heavily criticised some of the decisions of the administration. The Lib Dem’s deputy leader Sam Al-Hamdani noted the council had failed to deliver some of the savings it had promised in last year’s budget, and was not delivering on basic services like filling potholes. 

“If we’re being forced to pay a five percent increase, residents should at least be able to point to what’s being delivered,” he said. 
He also described social care as ‘the biggest elephant in the smallest room’ in local government. 

Cllr Al-Hamdani said: “It’s the biggest hole in our finances and local government is absolutely sinking. That’s not been addressed. Without addressing social care, any settlement is nothing of the sort.”