Shocking Council Blunder: Oldham Officials Overpaid £107k in Public Funds

An internal report has uncovered a significant financial blunder at Oldham Council, revealing that elected members were overpaid by a total of £107,111 due to staff errors. This anomaly meant that some councillors received more money than they were entitled to as part of their annual allowances for their roles.

The review, initiated last year after mistakes emerged, confirmed that £107,111 was incorrectly disbursed to current and former councillors. Out of 89 affected councillors, 76 were overpaid, while 13 were underpaid. Among those overpaid, 38 received an extra £1,000, and four councillors received sums exceeding £5,000, which have since been settled. Notable overpayments included ex-leader Arooj Shah (£5,072), Abdul Jabbar (£5,161), Marc Hince (£6,934), and Junaid Hussain (£8,461).

The report attributed these issues to “systemic weaknesses” within the council's operations, explicitly stating that “the responsibility for applying, administering, and ensuring compliance with the scheme rests entirely with officers.” It further clarified that elected members had no involvement in the scheme’s operation once approved. Key factors contributing to the incorrect payments included improper record-keeping and inaccurate allowance rates.

In response to these findings, the local authority has implemented a series of corrective actions to bolster governance and mitigate the risk of recurrence. These measures encompass the establishment of clear rules for payment start and end dates, enhancement of processes and audit trails across services, independent verification of allowance rates, improved communication with members, and the introduction of regular quality assurance and internal audit activities.

Regarding the resolution of these discrepancies, 41 out of 45 affected current councillors have concluded their cases, either through repayment or by establishing a repayment plan. Four cases are currently still in progress. For overpaid former members who have not yet responded to the council, recovery proceedings are set to commence shortly. These individuals will be given a 15-day window to establish contact and arrange a repayment plan before further action is taken.

Alex Bougatef, the director of legal services, affirmed the council’s commitment to rectifying the situation, stating, “While this was not an error by members, ultimately there is a duty to the public purse, and the council must seek to remedy the financial position.” He also confirmed that the council would utilize its Under and Overpayments Policy and Corporate Debt Policy to recover outstanding payments, ensuring the public purse is adequately safeguarded.

Grenville Page, independent chair of the audit committee, acknowledged the significant progress made in resolving the issue. A council spokesperson reiterated the commitment to an open, fair, and transparent resolution, thanking the majority of councillors for their constructive engagement. The spokesperson also emphasized that new procedures and additional checks have been implemented to prevent such administrative errors from recurring.