Hartlepool Borough Council warning over size of budget gap in 2025-26 finances
Council finance chiefs have warned their local authority is currently expected to face a near £10million budget gap next year.
Hartlepool Borough Council bosses said the budget deficit forecast for 2025-26 is at present predicted to be £9.985million while the estimated three-year gap over the period to 2027-28 is £15.658million.
This comes amid a number of challenges, many impacting local authorities across the country and region, including the rising cost of children’s social care, inflation and staff pay awards.
A presentation to the latest meeting of the finance and policy committee also highlighted how the issues come against a backdrop of a reduction in funding for the local authority over the last 14 years.
This has seen the council lose 500 posts, 20% of its workforce, since 2010.
James Magog, director of finance, IT and digital, said addressing the near £10million deficit for 2025-26 is a “very significant challenge” which could increase further due to costs linked to children’s social care pressures.
He said: “There is no respite in 2025-26.
“The funding system is fundamentally failing Hartlepool, we’ve got some significant cost pressures around children’s social care.
“I think there will have to be some very difficult decisions taken over the course of this year.”
He added no assumptions have been made yet on potential council tax rises, savings proposals or additional use of reserves, while there is further uncertainty currently due to the General Election.
Mr Magog noted “every council has got cost pressures” across the country and they are still awaiting the “fair funding review” first promised by the Government in 2016.
It is envisaged to create a fairer formula for the allocation of government funding to local authorities, benefiting the likes of Hartlepool, and officers noted the “earliest it could be introduced” now is 2026-27.
Councillor Brenda Harrison, council leader, praised the work of council finance officers, adding without their “prudent care” they “might be in a lot worse position”.
Meanwhile councillor Pamela Hargreaves proposed the council write to government ministers following the General Election to put forward the borough’s need for further funding after “savage cuts”.
She added: “You cannot underestimate the impact of trying to do more all the time with less money and fewer people.”
The council, however, did reduce a projected £4.2million overspend down to £612,000 during 2023-24.