Hartlepool Borough Council “Being Pushed Toward Bankruptcy” in Labour’s Election Gamble...
- teessidetoday
- Nov 27
- 4 min read
Labour’s Last Roll of the Dice: Council Leader is being Accused of Sacrificing Hartlepool’s Financial Stability to Fend Off Reform UK Ahead of 2026 Elections
27th November 2025
Hartlepool Borough Council's been plunged into political controversy after explosive claims emerged that the Labour leadership is knowingly risking the financial stability of the council in order to fend off political opponents Reform UK ahead of the May 2026 local elections.
According to senior sources, the Labour-led administration reportedly has no plans to backtrack on its plans to agree a Council Tax freeze for 2026/27, despite explicit warnings from the Council’s own Chief Finance Officer that such a decision would accelerate Hartlepool’s slide toward bankruptcy.
The move has been described by one councillor as “putting party before people”, after one councillor claims Labour is prioritising electoral survival over the long-term financial stability of the council.
Hartlepool Faces a Multi-Million Pound Financial Crisis
The council’s own Medium Term Financial Plan (MTFP) sets out the scale of the problem in black and white:
£8.572 million deficit for 2026/27
£20.591 million deficit forecast across the next four years
Reserves collapsing from £56 million down to just £13 million
Children’s Services projected overspend of £6.195 million this year alone
External placements costing £12 million per year for only the 25 most expensive cases
The council’s Budget Support Fund is now reportedly forecast to drop to just £3.4 million, which is less than the deficit for next year alone.
Despite this, its claimed Labours leadership continues to insist on a Council Tax freeze.
The financial consequences of that political gamble are severe, with council reports outlining that Freezing Council Tax will remove £562,000 for every 1% not applied — up to £2.804 million lost in a single year.
Over a decade, the council could lose around £30 million in potential revenue.
For a financially fragile council already teetering on the edge, that decision could be enough to tip it into the same fate that has already hit councils like Birmingham, Croydon, Slough and Thurrock.
Finance Officer’s Warning: “I Cannot Sign Off This Budget as Robust”
At the centre of the dispute is the council’s legally required Section 151 Officer — the Chief Finance Officer, whose duty is to ensure the budget is lawful.
In stark language rarely seen in Hartlepool’s municipal history, Mr Magog has warned councillors that he would not be able to sign off the council’s accounts as “robust” if the Labour administration forces through a Council Tax freeze. With a freeze on Council Tax removing one of the few remaining levers available to the council to keep itself afloat.
Reform UK Breaks Ranks: “We Can’t Ignore Officer Warnings”
In a twist that has intensified the political pressure on Labour, at a Finance & Corporate Affairs Committee meeting held at Hartlepool Civic Centre this week, Reform UK councillors refused to back Labour’s plan for a Council Tax freeze.
According to sources inside the chamber, one Reform UK councillor said:
“We cannot ignore officer warnings about the councils financial position. Labour’s gamble is purely politically motivated.”
Reform UK has positioned itself as the fiscally responsible alternative, arguing that a freeze — whilst popular with voters — could destroy the council’s ability to fund basic services in the long-term. The disagreement has set the stage for a fierce fight between Labour and Reform UK ahead of the May 2026 local elections, where both parties expect Hartlepool to be a key battleground.
Labour Accused of Political Self-Preservation Ahead of Whats said to be Labours ”Last roll of the dice in Hartlepool”...
Critics argue that Labour is deliberately ignoring the Section 151 Officer’s warnings in a last-ditch attempt to avoid public backlash over a tax rise months before an election, with Labour facing heavy criticism over its decision last year to hike council tax in Hartlepool by almost 5% despite pledges nationally for no Council Tax increases.
One senior councillor put it bluntly:
“Labour knows a Council Tax rise will cost them seats. They are gambling with the council’s future because they are terrified of Reform UK.”
Internal documents seen by the Teesside & Durham Post show Hartlepool Borough Council cannot produce a “robust” budget without at least one of three components:
1. A Council Tax rise,
2. Significant extra funding from government, or
3. Major additional service cuts.
Labour has already ruled out a tax rise, and the government’s Fair Funding 2.0 reforms are expected to deliver only a modest uplift — which the councils finance chief has already stated comes nowhere near enough to stabilise the finances, leaving Labour with one option: cuts, and lots of them.
The January Meeting: A Collision Course with Reality
The Council Tax freeze is expected to be put forward for formal approval at a full council meeting set to be held in January 2026, despite the Section 151 Officer signalling he will be unable to legally approve the budget in its current form.
If Labour pushes ahead, the council could spiral into:
Unbalanced budgets
Illegal financial decisions
A potential Section 114 notice — effectively declaring bankruptcy
If that happens, its claimed government-appointed commissioners would be required to take control of Hartlepool’s finances, removing power from locally elected members entirely.
Labours Dangerous Gamble with Hartlepool’s Future
Hartlepool is facing its most severe financial crisis in years. With multimillion-pound deficits, depleted reserves, exploding social care costs, and a Section 151 Officer refusing to sign off the accounts, the town is on the edge of a serious fiscal cliff.
Labour’s insistence on a politically convenient Council Tax freeze — despite professional warnings — is being viewed by many as a desperate attempt to avoid electoral damage from Reform UK next May.
Whether this gamble pays off politically is one thing.
Whether Hartlepool can survive it financially is another.
