The Cabinet received a report of the Director of Finance that provided Members with the budget reduction requirement and the Administration’s budget proposals for 2026/27, having regard to the Provisional Local Government Finance Settlement (PLGFS) published on 17th December 2025 and the subsequent Final Local Government Finance Settlement (LGFS) published on 9 February 2026. The report also presents the financial forecasts for the remainder of the Medium-Term Financial Strategy (MTFS) period 2028/27 to 2028/29 based on the Settlement information received from Central Government and provided an indicative narrative on the years 2029/30 and 2030/31 which are outside the LGFS period.
The submitted report presented the Council’s Revenue Budget for 2026/27 together with the budget reduction requirement and the Administration’s budget proposals for 2026/27 including Council Tax intentions. It also provided the financial forecasts for the MTFS period, 2027/28 to 2028/29 on the known settlement information and a high-level indicative narrative for the years 2029/30 and 2030/31 which were outside the LGFS period. Included within this report were several budget reduction proposals for consideration and a budgeted transfer to reserves for the financial years 2026/27 to 2028/29 which is the second consecutive that the Council’s revenue budget has been balanced without the need to use general revenue reserves to support it.
The Council has reviewed all the underlying assumptions in its approach to setting the revenue budget for 2026/27 onwards having regard for the impact of the Fair Funding Review 2.0 and the allocations published in the Local Government Finance Settlement. The revenue budget gap for 2026/27 is therefore revised to £20.301m. To balance the budget, a resources review has enabled budget adjustments of £10.196m, with Transformation Programme savings of £2.000m to be applied. £8.105m of budget reductions are proposed for delivery in 2026/27 which would balance the revenue budget position.
A version of the Revenue Budget 2026/27 and Medium-Term Financial Strategy 2027/28 to 2028/29 (based on the Provisional Local Government Finance Settlement (PLGFS) received on 17th December 2025) was presented to the Governance, Strategy and Resources Scrutiny Board on 28th January 2026. The Board scrutinised the report and the other reports on the agenda that formed a core part of the Council’s strategic financial planning framework and recommended them all to Cabinet. A further meeting of the Scrutiny Board took place on 5th February 2026, which considered budget proposals put forward by the Liberal Democrat Party. The Board recommended these proposals to Cabinet (minute 7, above, refers).
The report explained that each year, the Council identified what it needs to spend on Council services for the following year as part of the budget setting process. This process also involved the identification of provisional spending plans for future financial years. This ensured that the Council’s future spending plans were balanced against the funding forecasts for Government Grants, Council Tax and Business Rates revenues and aligned with the Council’s corporate plan. These plans formed part of the Council’s Medium Term Financial Strategy (MTFS) which sets out a financial forecast for the period 2026/27 to 2028/29. The first part of this report focused on the first year of the MTFS period and at Section 16 sets out a forecast for the final two years, 2027/28 to 2028/29 of the settlement period with and indicative budget position for the years 2029/30 and 2030/31 which were outside the current settlement period.
The Provisional Local Government Finance Settlement and associated funding announcements were received on 17th December 2025, with the Final Local Government Finance Settlement being received on 9th February 2026. This was the first multi-year settlement since 2016/17 and provided actual allocations for 2026/27 and indicative allocations for the two years 2027/28 and 2028/29. Forecasts for 2026/27 were updated using actual funding information (where available) and the 2027/28 to 2028/29 estimates had been revised using information in the LGFS and the Policy Statement. These revised estimates were presented in the submitted report.
In addition to the cost pressures that were anticipated when the initial estimates for 2026/27 and future years were prepared, for the ensuing financial year and had seen further financial challenges. The challenges included:
a. Continued increase in costs and the number of placements within Children’s Services.
b. Continued increase in costs and demand for Adult Social Care services.
c. Increased costs of maintaining the Council’s property portfolio.
The report added that when the initial 2026/27 MTFS was prepared, the forward estimates took account of the ongoing demand pressures detailed above but, as has been reported widely throughout the financial year, demand from and complexity of care required for the Borough’s residents particularly in the area of social care services had continued to place significant additional pressures on the budget in 2025/26 and subsequently beyond. In year mitigations had been implemented throughout the financial year to address the financial pressures which have had a positive impact on the revenue forecast outturn yet, as detailed in the Quarter 3 budget monitoring report (minute 8, above refers), the forecast position was still expected to end with an adverse revenue position at the end of the financial year. Any in-year overspend would impact on the level of reserves available to support the budget on an ongoing basis and the reserves available by 2026/27 were outlined in Section 13, of the submitted report.
At the same time as considering the financial challenges facing the Council, it was also important to consider the Council’s commitment to the co-operative way of working. Based on a set of values and the principle of enabling and motivating everyone to “do their bit”, this influenced the policy direction of the Council and its response to the various financial challenges.
As an organisation, a co-operative approach provided the opportunity to find positive and sustainable solutions to the on-going financial challenges being faced. Oldham had a values driven approach which underpinned the way that it did business. The Council believed in the importance of fairness and responsibility. In practice, that meant maximising the positive social, economic and environmental impact that can be achieved through everything that the Council does, as set out in the Council’s values.
In terms of consultation, it was reported that members of the public and stakeholders had been consulted on the proposals detailed in the report and associated appendices and invited to submit feedback. A proactive approach to communications was taken, with a multi-channel communications strategy incorporating digital, social and traditional media, ensuring that residents and businesses across Oldham were aware of the Council’s 2026/27 budget proposals and were able to have their say. An update of the consultation responses was included at Appendix 11, to the report.
Options/Alternatives considered:
Option 1 – that the Cabinet accepts the 2026/27 Council Tax and ASCP increases as set out at Appendix 10, of the submitted report and the budget assumptions and resulting financial forecasts presented within the report.
Option 2 – that the Cabinet proposes amendments to the assumptions which would change the resulting financial forecasts and budget reduction requirement.
Option 3 – that the Cabinet approves and commends to Council all the budget proposals included in the submitted report and the reported approach to reserves and balances.
Option 4 – that the Cabinet approves the fees and charges for 2026/27, as detailed at Appendix 8 to the report.
Option 5 – that the Cabinet requests that further work is undertaken on some, or all, of the budget proposals and the approach to reserves and balances and that the Cabinet considers a revised position.
Preferred Option - Options 1, 3 and 4 are the preferred options. Assumptions, in the report, were based on objective research and the latest available information. The Council has a statutory duty to set a balanced budget and the budget reductions included in the Director of Finance’s report fulfilled that requirement.
Resolved:
That Cabinet approves and commends to Council, on 4th March 2026:
1. The policy landscape and context in which the Council is setting its revenue budget for 2026/27.
2. The financial forecast for 2026/27 having regard to the Local Government Finance Settlements and associated funding announcements.
3. The Flexible Use of Capital Receipts at a value of £2.6m for 2026/27.
4. A proposed overall 2026/27 Council Tax increase of 4.99% for Oldham Council services (2.99% for general purposes and 2% Adult Social Care Precept) resulting in the charges set out at Table 10 of the report.
5. The Transformation Programme savings for 2026/27 at £2.000m.
6. The 2026/27 Budget Reduction proposals at a value of £8.105m.
7. The proposed transfer to reserves of £1.600m in 2026/27 to improve the financial robustness of the Council.
8. The proposal to draw on the Collection Fund for major preceptors of £155.564m for Borough Wide services and £129.237m for Council services.
9. The proposed net revenue expenditure budget for 2026/27 for the Council set at £368.053m.
10.The proposed fees and charges as set out in the schedule included at Appendix 8, of the Director of Finance’s report.
11.The level of general fund balances supporting the 2026/27 budget of £18.865m underpinned by the agreed policy on Reserves.
12.That the Cabinet notes the alternative budget reduction proposals presented as part of the Liberal Democrat budget, which was previously scrutinised by the Governance, Strategy and Resources Scrutiny Board on 5th February 2026.