The warning has come from the council’s new leader, Councillor Dave Bruce, who has made addressing the financial position an immediate priority, asking officers to undertake an urgent review and implement the measures needed to secure the local authority’s long-term future.
The council faces a projected budget gap of around £12 million in 2027/28, despite ongoing work to reduce costs, improve efficiency and transform services. For context, this is double the equivalent gap in 2025/26. The challenge is being driven primarily by increasing numbers of children requiring care and support, the growing complexity of those needs and continued pressures across social care services.
Councillor Bruce said: “I want to reassure residents that services continue to be delivered and that the council remains stable. However, we also have a responsibility to be open and honest about the scale of the challenge before us. The biggest pressure on our finances continues to be children’s social care. We are supporting more children than ever before, many with increasingly complex needs and the costs associated with providing that care continue to rise.”
Coin. Bruce added: “For a number of years, we have been able to manage growing financial pressures by using cash reserves held by the council. Those reserves have now largely been used and that is no longer a sustainable option. We must take action now to tackle these challenges, put our finances on a more secure footing and safeguard the council’s long-term future.”
The council has a legal duty to protect and care for vulnerable children and young people. In recent years, the number of children needing support has increased significantly, while the needs of many already in care have become more complex.
The local authority currently cares for 386 children and young people, significantly above regional and national averages. Safeguarding referrals to the council’s Children’s Hub have increased by 20% compared with the same period last year.
Some children require specialist residential placements to keep them safe and meet their individual needs. The council currently has 54 children in external placements, each costing an average of more than £7,300 per week. Eight of those placements each cost more than £10,000 per week. The council’s 25 highest-cost placements alone amount to a total of around £230,000 every week – equivalent to approximately £12 million a year.
The council is continuing to invest in services designed to support families earlier, prevent children entering care wherever possible and improve outcomes for young people. This includes opening a new council-run children’s home, expanding family support services, increasing fostering recruitment activity and working with regional partners to tackle challenges in the children’s social care market. Alongside this work, the council has redeveloped its council-wide transformation programme, focusing on improving efficiency, reducing costs and ensuring services are delivered as effectively as possible.
Coun. Bruce added: “A full update will be provided later this autumn, including further details of the measures being considered to address the budget gap. Unfortunately, some of those decisions are likely to be difficult, but doing nothing is simply not an option. Despite these challenges, we remain ambitious for Hartlepool’s future. We are working to attract new businesses, bring more visitors to the borough and support the delivery of new homes for our residents, working with partners such as Homes England, the Combined Authority, and investors. Growing our economy is a clear priority for our administration, giving our residents the opportunity to access good jobs, and our businesses room to grow.”
