What is Council Tax?

Council Tax is a property-based tax, with a personal element.

The basis of the tax is that a property is occupied by two adult residents. In such a case, half the tax will relate to the property element and half to the personal element.

Oldham Council collects Council Tax for its own purposes and also on behalf of Saddleworth and Shaw & Crompton Parish Councils and the Greater Manchester Combined Authority (GMCA) for two components, the Mayoral Police and Crime Commissioner Precept and the Mayoral General Precept (including Fire Services).

For more information about the GMCA precepts please see Council Tax contributions to GM precepts:

Council Tax is not a direct payment for services so it must be paid whether you use the services or not.

What does it pay for in Oldham?

The Oldham Council element of your Council Tax helps to pay for services we provide throughout the borough, like:

  • Protecting and supporting older people and vulnerable adults
  • Protecting and supporting children and young people
  • Collecting, recycling and disposing of your rubbish
  • Maintaining roads, pavements and street lighting, and cleaning your streets
  • Running your libraries and leisure centres
  • Looking after your parks and open spaces
  • More than 500 other services including planning, trading standards, elections, cemeteries and registration of births, marriages and deaths 

Your Council Tax also pays for levies (payments we have to make to other organisations) for services such as public transport and waste disposal.

The Adult Social Care Precept element of your Council Tax was introduced from 1 April 2016 and helps fund the increasing cost of providing Adult Social Care services.

Separate elements of your Council Tax also contribute towards the services provided by:

  • The Greater Manchester Mayor as Police and Crime Commissioner
  • The Greater Manchester Mayor for general functions including those previously provided by the Greater Manchester Fire and Rescue Authority
  • Saddleworth Parish Council (only residents in Saddleworth)
  • Shaw and Crompton Parish Council (only residents in Shaw and Crompton)

Council Tax levels and budget information

The main sources of income that support the Council’s net revenue expenditure budget are:

  • Council Tax
  • Business Rates
  • Central Government Grants

Below are tables and information that show:

  • Council Tax levels for 2019/20 compared to 2018/19
  • Gross Income and Expenditure levels
  • How the Council’s budget has changed compared to 2018/19
  • A summary of where money is spent and where funding comes from

Council Tax levels

The Council Tax payable for 2019/20 for Band D properties is presented below. It is split into separate elements and includes a comparison against 2018/19 charges where appropriate.

Council Tax Element 2018/19
Band D Council Tax
£
2019/20
Band D Council Tax
£

Change

£

Change

%

Oldham Council Services 1,475.26 1,506.34 31.08 * 1.99
Adult Social Care Precept 86.78 118.02 31.24 * 2.00
Council Tax for Council Services 1,562.04 1,624.36 62.32 3.99
Mayoral Police and Crime Commissioner Precept 174.30 198.30 24.00 13.77
Mayoral General Precept (including Fire Services) 67.95 76.95 9.00 13.25
TOTAL BAND D COUNCIL TAX 1,804.29 1,899.61 95.32 5.28
Saddleworth Parish Council 20.76 21.76 1.00 4.82
Shaw & Crompton Parish Council 16.21 16.53 0.32 1.97

* Percentage increase compared to 2018/19 Council Tax for Oldham Council Services of £1,562.04.

The Council is required to calculate its Relevant Basic Amount of Council Tax to determine whether it needs to hold a Council Tax referendum.

A referendum would be necessary should there be an increase above the level Central Government considers to be excessive.

This “excessiveness” is determined annually but for 2019/20 for Oldham has been set at a 5% increase above the respective Council Tax for the previous year, comprising 2% for Adult Social Care and 3% for other Council Services.

The increase of 3.99% shown in the table above is not therefore classed as excessive and has not triggered a referendum.

The amounts shown for Saddleworth and Shaw and Crompton Parish Councils are only payable by residents living in those Parish areas.

Council Tax Requirement

The Council must prepare a statutory calculation - the Council Tax Requirement.

This is calculated by multiplying the Tax Base in an area (the number of Band D equivalent dwellings for Council Tax purposes) by Band D Council Tax.

The Band D Council Tax figures are shown in a previous table whilst the Tax Base for each area is as follows:

Tax Base for Council Tax 2018/19 2019/20 Change
Oldham Council Area 55,666 56,693 1,027
Of which:      
- Saddleworth Parish Area 8,529 8,627 98
- Shaw & Crompton Parish Area 5,363 5,438 75

The resulting Council Tax Requirement is shown below:

Council Tax Requirement 2018/19
Council Tax
Income
£000
2019/20
Council Tax
Income
£000

Change
£000

 

Funding for Council Services 86,953 92,090 5,137
Saddleworth Parish Council 177 188 11
Shaw & Crompton Parish Council 87 90 3
Council Tax Requirement 87,217 92,368 5,151

The amount of revenue raised from each element of Council Tax in 2019/20 is presented below compared to 2018/19 including additional resources generated by Tax Base growth.

The total raised which helps pay for Council Services is £92.090m. Within this amount, £6.691m helps pay for Adult Social Care services.

In total therefore, income generated by Council Tax for borough wide Council services has increased by £5.137m between years.

Elements for the Parish Councils are collected on behalf of those organisations.

Council Tax Element 2018/19
Council Tax
Income
£000
2019/20
Tax Base
Growth
£000
2019/20
Council Tax
Increase
£000
2019/20
Council Tax
Income
£000
2019/20
Total
Change
£000
Oldham Council Services 82,122 1,515 1,762 85,399 3,277
Adult Social Care Precept 4,831 89 1,771 6,691 1,860
Revenue for Oldham-wide Council Services 86,953 1,604 3,533 92,090 5,137
Saddleworth Parish Council 177 2 9 188 11
Shaw and Crompton Parish Council 87 1 2 90 3

In addition, £11.242m will be generated in Council Tax for the Mayoral Police and Crime Commissioner Precept and £4.363m for the Mayoral General Precept (including Fire Services).

Gross Income and Expenditure

The table below shows the gross income and expenditure for all Oldham Council services along with financing from general grants, business rates and reserves.

Net expenditure for 2019/20 is £224.112m and is largely financed from General Government Grants, Retained Business Rates and Council Tax revenues totalling £215.294m.

The remaining balance is financed by the use of specific reserves together with £3.890m of Corporate Reserves.

The Gross Expenditure for 2019/20 is £580.552m of which £356.440m is financed from other income including service specific grants and income from fees and charges.

thead>
  2018/19 2019/20
 

Gross Exp

£000

Income

£000

Net Exp

£000

Gross Exp

£000

Income

£000

Net Exp

£000

Portfolio Detail            
People and Place 340,773 (246,028) 94,745 343,887 (244,600) 99,285
Health & Adult Social Care Community Services 84,270 (29,921) 54,349 89,225 (30,496) 58,730
Reform 35,045 (6,930) 28,115 37,095 (9,454) 27,641
Corporate and Commercial Services 96,912 (74,842) 22,070 84,064 (63,626) 20,438
Chief Executive 3,651 (339) 3,312 4,061 (421) 3,641
Capital, Treasury, Corporate and Technical Accounting 19,932 (5,900) 14,032 21,923 (7,843) 14,080
Parish Precepts and Grants 298 0 298 297 0 297
Portfolio Totals 580,881 (363,960) 216,921 580,552 (356,440) 224,112
Financed by:            
Retained Business Rates     (51,352)     (50,826)
Business Rates Top Up Grant     (47,975)     (40,653)
Grants in lieu of Business Rates     (8,477)     (10,503)
New Homes Bonus Grant     (1,601)     (961)
Housing and Council Tax Benefit Administration Grant     (1,220)     (1,121)
Independent Living Fund Grant     (2,661)     (2,580)
Improved Better Care Fund Grant     (7,888)     (9,736)
Adult Social Care Support Grant     (701)     0
2019/20 Winter Pressures Grant     0     (1,122)
2019/20 Social Care Support Grant     0     (1,917)
Other Non Ringfenced Government Grants     (565)     (545)
GMCA Mayoral Grant     0     (693)
Council Tax - General     (82,122)     (85,399)
Council Tax - Adult Social Care Precept     (4,831)     (6,691)
Council Tax - Saddleworth Parish Council Precept     (177)     (188)
Council Tax - Shaw Parish Council Precept     (87)     (90)
Collection Fund Surplus     0     (2,269)
Total Financing     (209,657)     (215,294)
Balance Remaining     7,264     8,818
Approved Use of Reserves            
Use of Reserves to Support Budget Reductions (approved 2016/17)   (250)     (250)
Early Help Initiative Reserve (approved January 2018)     (689)     0
Revised Gap after Previously Approved Use of Reserves     6,325     8,568
Business Rates Additional Resources (Reserves)            
2017/18 Small Business Rates Relief Threshold Change Compensation   (1,358)     0
2017/18 Business Rates Retention Pilot Reserve     (1,300)     0
Business Rates Retention Pilot - GMCA Returned Resources     0     (1,825)
Business Rates Retention Reserve - National Levy Account 2018/19 Surplus   0     (978)
Business Rates 2017/18 Pilot Scheme Gain     0     (500)
Business Rates 2018/19 Pilot Scheme Gain     0     (1,218)
Revised Gap after the Use of Business Rates Reserves   3,667     4,047
Waste Smoothing Reserve     0     (157)
Use of Corporate Reserves to Balance the Budget     (3,667)     (3,890)
Final Balance     0     0

Note: The 2018/19 Portfolio budgets, for comparison purposes, are presented in line with the current 2019/20 Council structure.

Gross Expenditure by Portfolio

The table below shows the percentage share of the 2019/20 gross revenue expenditure of the Council by the service delivery portfolios:

Portfolio %
People and Place 59
Health & Adult Social Care Community Services 15
Reform 6
Corporate and Commercial Services 15
Chief Executive 1
Capital, Treasury, Corporate and Technical Accounting 4
Total 100

How the Council’s budget has changed compared to 2018/19

The following table shows how the net revenue expenditure budget and financing for 2019/20 has changed from the previous year.

 

£000

£000

Budget Adjustments

 

 

Adjustments to the Base Budget

 

 

Use of Reserves in 2018/19

7,264

 

One-off 2018/19 savings

300

 

One-off 2018/19 Expenditure

(4,772)

 

Total Adjustments to the Base Budget

 

2,792

Expenditure Pressures

 

 

Adult Social Care Demand Pressures

6,171

 

Children's Social Care Demand Pressures

4,611

 

Passporting of Adult Social Care Precept

1,860

 

Pay and Price Inflation

2,762

 

GMCA Levy for Waste Disposal

585

 

GMCA Levy for Transport

251

 

Environment Agency Levy

2

 

Investment Fund

3,653

 

Homelessness

194

 

Early Help

750

 

Brexit Preparations

105

 

Software Licenses

250

 

Street Cleaning

240

 

Coroners Service

180

 

Home to School Transport

175

 

Building Control Fees

167

 

Get Oldham Working

140

 

Accommodation Costs for Public Health

382

 

Increased Parish Precept (offset by Parish Council income)

14

 

Total Expenditure Pressures

 

22,492

Total Net Budget Adjustments

 

25,284

Less Changes in Funding

 

 

Reduction in Government Grants

 

 

Business Rates Top Up Grant

(7,322)

 

Improved Better Care Fund Grant - Spring Budget 2017 allocation

(1,615)

 

Adult Social Care Support Grant

(701)

 

New Homes Bonus Grant

(640)

 

DWP Implementation of Universal Credit Grant

(204)

 

Independent Living Fund Grant

(81)

 

Extended Rights to Free Travel Grant

(26)

 

Housing and Council Tax Benefit Administration Grant

(99)

 

Total Reduction in Government Grants

 

(10,688)

GMCA Grants

 

 

GMCA Mayoral Grant

693

 

Total GMCA Grants

 

693

Increase in Government Grants

 

 

Improved Better Care Fund Grant - Settlement 2015 Allocation

3,463

 

2019/20 Winter Pressures Grant

1,122

 

2019/20 Social Care Support Grant

1,917

 

2019/20 Brexit Preparation Grant

105

 

Other Non Ringfenced Government Grants

105

 

Grants in lieu of Business Rates

2,026

 

Total Increase in Government Grants

 

8,738

Change in Locally Generated Income

 

 

Additional Council Tax Income

5,137

 

Saddleworth Parish Council Precept

11

 

Shaw Parish Council Precept

3

 

Retained Business Rates (net reduction)

(526)

 

Total Changes in Locally Generated Income

 

4,625

Total Net Increase in Funding

 

3,368

Total Budget Reduction Requirement (Net Budget Adjustments Less Net Increase in Funding)

 

21,916

Budget Reductions by Portfolio

 

 

 - Health and Adult Social Care Community Services

(82)

 

 - People and Place

(869)

 

 - Reform

(513)

 

 - Chief Executive

(75)

 

 - Corporate & Commercial Services (Including Capital and Treasury)

(6,290)

 

Total Budget Reductions

 

(7,829)

Revised 2019/20 Budget Reduction Requirement

 

14,087

Other Funding Sources

 

 

Flexible Use of Capital Receipts

(3,000)

 

Collection Fund Surplus

(2,269)

 

Total Other Funding Sources

 

(5,269)

Revised 2019/20 Budget Reduction Requirement to be Addressed by the Use of Reserves

 

8,818

Previously Approved Use of Reserves

 

 

Use of Reserves to Support Budget Reductions (approved 2016/17)

 

(250)

Revised Gap after Previously Approved Use of Reserves

 

8,568

Business Rates Additional Resources (Reserves)

 

 

Business Rates Retention Pilot - GMCA Returned Resources

 

(1,825)

Business Rates Retention Reserve - National Levy Account 2018/19 Surplus

 

(978)

Business Rates 2017/18 Pilot Scheme Gain

 

(500)

Business Rates 2018/19 Pilot Scheme Gain

 

(1,218)

Revised Gap after the Use of Business Rates Reserves

 

4,047

Waste Smoothing Reserve

 

(157)

Use of Corporate Reserves to Balance the Budget

 

(3,890)

Net Balanced Position

 

0

To maintain services, in 2019/20 the Council has had to add £25.284m to its net budget requirement as a result of a range of pressures including price inflation and increased demand for Children’s and Adult’s Social Care.

Government Grants available for general purposes have reduced by £10.688m which has contributed to the overall savings requirement for the Council. The Government however has recognised the need for additional support for Social Care Services and has provided grants for the Improved Better Care Fund (£3.463m), Winter Pressures (£1.122m) and Social Care Support (1.917m).

Grants in lieu of Business Rates have increased by £2.026m but this has a neutral impact as there is an equal and opposite reduction to the amount the Council can collect locally as Retained Business Rates and therefore does not increase the spending power of the Council.

Changes to locally generated income arise from an increase in the Council Tax Tax Base and Council Tax increases however these have been offset in part by a net reduction in Business Rates income. The overall changes in locally generated income for 2019/20 have resulted in additional resources at a value of £4.625m.

The required net budget adjustments of £25.284m, less the total net increase in funding of £3.368m, resulted in a total 2019/20 budget reduction requirement of £21.916m.

The Council meeting of 27 February 2019 approved a number of measures to address this budget reduction requirement and deliver a balanced budget for 2019/20. These were:

  • portfolio budget reductions of £7.829m;
  • the Flexible Use of Capital Receipts at a value of £3.000m;
  • the use of a Collection Fund Surplus of £2.269m;
  • the use of specific reserves at a value of £4.928m; and
  • the use of Corporate Reserves at a value of £3.890m.

In accordance with standard practice the budget will be monitored during 2019/20 to ensure any financial issues are identified and addressed.

Where money is spent and where funding comes from

The following tables show the proportionate net expenditure and funding sources for the 2019/20 budget:

How Your Money is Spent

Portfolio %
People and Place 45
Health & Adult Social Care Community Services 26
Reform 12
Corporate and Commercial Services 9
Chief Executive 2
Capital, Treasury, Corporate and Technical Accounting 6
Total 100

Where the Money Comes From

Funding Source %
Business Rates Top Up Grant 18
Grants in Lieu of Business Rates 5
Better Care Fund Grant 4
Other Grants / Funding 4
Retained Business Rates 23
Council Tax 41
Collection Fund Surplus 1
Use of Reserves 4
Total 100