By Charlotte Hall – Local Democracy Reporter
OLDHAM Council has announced a borough-wide recruitment freeze as it battles to close a £23 million gap in its finances – warning it may be forced to seek emergency government support if the situation worsens.
The authority, one of Oldham’s largest employers, says it faces a “critical” challenge to balance its books, with projected overspending rising from £20m to £23m in just two months.
If the council cannot stabilise its finances, it may have to apply for Exceptional Financial Support from the government before the next budget – a move regarded as one step away from declaring effective bankruptcy under Section 114.
Speaking at a cabinet meeting on Monday, October 20, finance boss Cllr Abdul Jabbar said decisive action was being taken to tighten financial control.
“The executive team has taken steps to strengthen financial oversight. All non-essential spending now requires director or executive director approval,” said Cllr Jabbar.
“We’ve also taken the decision to freeze all recruitment, except for critical roles that are assessed on a case-by-case basis. We’re having to do this because of the really demanding cost pressures and rising levels of need we’re seeing.”
The main pressures, he explained, come from surging demand for essential services such as adult social care, children’s services, and temporary housing, alongside spiralling costs for external contracts like children’s homes and SEND provision.
From June to August, the council’s predicted overspend rose by £2.387m, reaching £23.209m in total. Adult social care accounts for more than £12m, temporary housing around £6m, and children’s services nearly £5m of that total.
“More residents and businesses are turning to the council for support,” Cllr Jabbar added.
“There’s been a sharp increase in demand for SEND services and temporary accommodation, both of which carry a substantial cost. A growing number of working-age adults are now seeking care – a shift from the traditional focus on older people.”
While recruitment is frozen across most departments, the council confirmed that children’s social care remains exempt due to urgent staffing needs.
Council leader Cllr Arooj Shah said Oldham remains committed to balancing its budget while continuing to support residents.
“We’re grateful for the government’s shift towards needs-based funding, but conditions for local government remain extremely challenging,” she said.
“We know there’s light at the end of the tunnel – we just need that light to come a lot sooner. In the meantime, we’ll do whatever it takes to balance the budget and support our residents.”
Oldham currently holds £24m in reserves, but much of this has already been used to cover budget shortfalls in previous years. The council has also struggled to implement around 20% of planned cuts from its 2025/26 budget, prompting “serious concerns” about long-term financial sustainability.
A report presented to Cabinet warned:
“The budget pressures the council has faced in recent years cannot be mitigated indefinitely given the resources available. With reduced reserves, this position must be addressed as a priority and reduced by year-end to protect the financial sustainability of the council.”