27 July 2001
Financial staff at Oldham Metropolitan Borough Council have predicted that the authority's reserves could be bled as low as £1.28m unless immediate action is taken. The district auditor has recommended that the reserves are maintained at a minimum level of £4m.
The council, still recovering from the May riots – the worst in the northern town for 15 years – was told at a policy meeting on July 23 that it faces a worsening financial position if no action is taken in the next eight months.
The Liberal Democrat-run council has set up a review to prioritise cuts. There are fears that reductions in services will amplify the unease in the Fitton Hill, Coldhurst, Glodwick and Werneth areas which were most affected by the unrest.
Options being considered by the council include raising council tax by 20% or making £11.5m of ongoing service cuts next year.
The council's social services department accounted for £752,000 of the total £2.3m overspend.
The council also underestimated the government's pay awards by £500,000 and failed to make the expected £150,000 savings last year from cut-backs in residential and home care.
Council leader Richard Knowles said: 'There will be a lot of painful choices. It is a daunting task, and we will not pretend that the situation isn't serious. But we can do it.'
The council and Greater Manchester Police are to apply to the home secretary to ban all marches in Oldham until the end of October.
PFjul2001
