Government Funding Overhaul Set to Boost Hartlepool Councils Coffers — But A Council Tax Freeze Is Still Unlikely...
- teessidetoday
- 4 days ago
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New Government Settlement Set to Favour Deprived Councils Like Hartlepool, But the Government Still Expects Councils to Raise Council Tax Bills, Souring the Labour Run Councils Plans to Freeze them...
19th December 2025
The government has announced what it describes as a “radical overhaul” of local government funding, with almost £78 billion to be made available to councils in England next year. On the surface, this is likely to represent 'good news' for areas such as Hartlepool — but critics claim it also quietly undermines The Labour Run Council's bid to freeze local residents council tax bills in 2026.
Hartlepool Stands to Gain, but by how much ?
Hartlepool Borough Council is highly likely to be a net beneficiary of this new settlement. The reforms are said to be explicitly designed to direct more funding towards local councils serving what the government claims is 'deprived communities', replacing a long-criticised system that allowed wealthier councils to build up huge financial reserves, while towns like Hartlepool struggled to maintain basic services.
Under the new evidence-based funding model, its claimed the most deprived 10 per cent of councils will receive a 24 per cent per-head funding boost, with core spending power across local councils increasing by over 23 per cent by the end of the settlement, compared with 2024–25 with the increased funding better reflecting the true cost of delivering services such as housing, waste collection, and children’s services in deprived areas..
Given Hartlepool’s long-standing classification as a high-deprivation region, the town is precisely the type of area this settlement is designed to support. In practical terms, this should ease pressure on council budgets that have been stretched for years — particularly in relation to Children’s services, Housing and homelessness provision, Street cleansing and environmental services, as well as Community assets such as libraries and youth provision.
Crucially, this is also the first multi-year funding settlement in over a decade, giving councils three years worth of financial certainty rather than forcing them into annual crisis budgeting.
Recovery Grants and Protection From Shock Cuts
Hartlepool is also likely to benefit indirectly from the continuation of the £600 million Recovery Grant, which is targeted at councils hit hardest by historical under-funding.
While Hartlepool is a unitary authority rather than an upper-tier county council, the broader protection mechanisms built into the settlement — including phased implementation of funding changes — reduce the risk of sudden financial shocks that have previously pushed councils towards insolvency and marks a clear shift away from the austerity-era approach that left councils firefighting year after year.
Social Care Funding Brings Relief — But Not a Free Pass
Adult and children’s social care remain among Hartlepool Borough Council’s largest and fastest-growing cost pressures.
The settlement confirms:
£4.6 billion extra for adult social care by 2028–29
£500 million earmarked for improving care workers’ pay
£2.4 billion for children’s social care reform over the settlement period
Critics claim the additional funding should help stabilise services that have consumed an increasing share of the council’s budget — but it does not eliminate the structural pressures caused by demand, demographics, and workforce shortages.
The Council Tax Reality Labour Would Rather Avoid
Despite the scale of the funding announcement, one key point is unmistakable: the government still expects local councils to raise council tax.
The settlement makes clear that Council tax rises remain capped at 3 per cent, plus an additional 2 per cent social care precept creating an effective 5 per cent annual increase threshold. The government is expecting councils to use this flexibility to balance their budgets responsibly. In other words, while ministers repeatedly stress that it is “up to local leaders” whether to raise council tax or not, the framework is designed on the assumption that they will & wont look favourably towards those who fail to implement the increase.
This directly undermines Hartlepool Borough Council's Labour Run promoted idea of a council tax freeze in 2026, where its claimed even with increased central funding, refusing to raise council tax would mean voluntarily leaving millions of pounds worth of revenue uncollected — money the government clearly expects councils to rely upon when funding services.
For a council like Hartlepool, with limited reserves and high service demand, freezing council tax would not only be fiscally bad; but it would require cuts elsewhere, or the depletion of already-thin financial buffers even with any increase in government funding planned.
The settlement also includes reforms that may benefit Hartlepool over the longer term with local councils being allowed to retain all additional council tax generated by new homes, incentivising development as well as 36 funding streams worth £56 billion being simplified, reducing bureaucracy and administrative overheads.
More Money, But Fewer Excuses
There is little doubt that Hartlepool Borough Council stands to benefit significantly from the governments funding overhaul. More money will flow to deprived areas, financial certainty will improve, and the worst distortions of the old system to be removed.
However, this settlement also removes a key political fig leaf.
With increased funding, social care support, and multi-year certainty in place, any decision to freeze council tax in 2026 would be a political choice, not an economic necessity — and one taken against the clear expectations of central government.
For residents, more money may be coming into Hartlepool, but council tax rises of up to 5 per cent per year remain firmly baked into the system, regardless of local promises by Labour leaders to the contrary.
