Hartlepool Borough Council is warning that the rising number of children entering the care system in Hartlepool is creating unprecedented financial challenges for the authority.
The warning has come from the Council's new Leader, Councillor Dave Bruce, who has made addressing the Council's financial position an immediate priority, asking officers to undertake an urgent review and implement the measures needed to secure the Council'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: "Having taken over as Leader of the Council two weeks ago, one of my first priorities has been to fully understand the financial challenges facing the Council. It is clear that the Council's financial position continues to be the biggest challenge we face as an organisation and the budget gap we are projecting is unprecedented.
"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.
"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 Council 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.
Councillor Bruce added: "There is no doubt that changes to local government funding by the Government have not gone anywhere near far enough to meet the needs of our borough. We need additional support from Government and I will give it my all to secure the funding Hartlepool deserves.
"This is not a political issue. It is about ensuring vulnerable children receive the care they need and protecting the services our residents rely on. I hope all councillors, partners and residents will come together to support the work ahead.
"Our administration has only been in place for a matter of months, but it has become clear that while we can and must transform services, it will require tough decisions. We are determined to face this challenge head on. That will require difficult decisions and honest conversations, but they are decisions we are prepared to make, with the needs of residents as our absolute priority.
"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.
"While these plans will take time to deliver, we remain committed to protecting the services that matter most to residents, investing in our communities and making the strongest possible case to Government for fairer funding. We will keep fighting for the support Hartlepool needs and deserves."
Further details on the Council's financial position and proposed next steps will be published later this autumn.