In-Depth: Hartlepool Borough Council’s Financial Turnaround, Labour’s Council Tax Freeze, and the Budget Challenges for a Potential Reform Council in 2026
- teessidetoday
- 4 days ago
- 9 min read
Hartlepool Borough Council's 'Miraculous Financial Recovery' has led to claims councillors arent getting the full picture from HBC finance chiefs & that Labours 'Playing Politics' on Council Tax.
13th July 2025
A Teesside Local Council's been thrust into the spotlight, following a motion raised by Independent and Conservative councillors demanding clarity on the council’s alleged dramatically improved financial position, which has enabled the local Labour’s ruling group to propose a council tax freeze for the 2026-27 financial year.
The announcement reportedly comes just months after Labour insisted that budget pressures necessitated a 4.99% council tax increase for 2025-26 at Hartlepool Borough Council. The timing of this financial turnaround, coupled with Labour’s loss of another council seat to Reform UK’s Ed Doyle in a Throston Ward by-election on July 10, 2025, is said to be raising critical questions about the sustainability of Labour’s pledge to freeze council tax & its impact on the councils budget, as well as the potential challenges a Reform UK-led council could face if it manages to gain control of Hartlepool Borough Council in May 2026.
This report delves into the details of Hartlepool’s financial situation, Labour’s council tax freeze proposals, the political dynamics at work, as well as the risks that could potentially confront a future Reform UK-led administration if the current electoral trend in Hartlepool continues.
From 'Potless' to 'Pot Full', somethings just not quite adding up !
Hartlepool Borough Council's faced significant financial challenges in recent years, primarily to what it claims has been funding reductions from central government since 2010.
In January 2025, Hartlepool Borough Council publicly reported a £16.5 million funding shortfall for the 2025-26 financial year, allegedly driven by rising costs and stagnant revenue streams. To address this, The Hartlepool Labour Group, which regained control of the council in May 2024 after years of Conservative and Independent coalition rule, implemented a 4.99% council tax increase (comprising of a 2.99% core increase and a 2% adult social care precept). Council Leader Brenda Harrison at the time described the hike as a “necessity” to balance the budget and avoid deeper cuts to services, citing “years of Tory failure and financial chaos” as the root cause of the council’s woes.
However, in June 2025, just five months after implementing a near 5% Council Tax increase to the borough, Labour then announced a surprising shift: a council tax freeze for 2026-27, aimed at easing financial pressures on local residents. This decision was attributed to a close collaboration between Council Leader Brenda Harrison, Hartlepool MP Jonathan Brash, and national government ministers, alongside an improved Provisional Financial Settlement from the Labour government, which provided an additional £10 million in funding for 2025-26. The council also planned to close the remaining budget gap through £2.9 million in savings as well as using £1 million from reserves, with that coming with a warning from council finance officials that the use of reserves was becoming increasingly unsustainable.
The sudden ability to freeze council tax prompted scepticism from opposition councillors, particularly those on the Independents and Conservatives, who've recently raised a motion to the councils next full meeting demanding full transparency on just how the council’s financial position has managed to improve so rapidly. They argue that Labour’s claim of budget pressures in 2025, which justified the tax hike, contrasts sharply with the optimistic narrative now being presented. This motion seemingly reflects broader concerns about whether Labour’s financial strategy is actually sustainable, or merely a short-term political manoeuvre to bolster public support ahead of the May 2026 local elections.
Labour’s Council Tax Freeze: A Political and Economic Gamble
Labour’s decision to freeze council tax in 2026-27 is framed as a response to the cost-of-living pressures facing Hartlepool residents, many of whom live in Band A to C properties and are disproportionately affected by the current council tax system. Hartlepool MP Jonathan Brash, a vocal advocate for council tax reform, has highlighted the system’s increasingly regressive nature, noting that Hartlepool residents in Band A properties pay £1,585 annually, compared to just £648 pounds for similar properties in Westminster. The freeze aligns with Labour’s broader campaign to reform local government funding, including the Fair Funding Review 2.0, which aims to redirect resources from wealthier southern councils to less affluent areas like Hartlepool.
However, the freeze comes with risks. By forgoing additional council tax revenue, its claimed the council's likely to be relying heavily on central government funding and financial reserves to balance the budget. The £10 million uplift in the 2025-26 settlement is significant, but it does not fully address the structural funding issues that have plagued Hartlepool for over a decade. The council’s use of £1 million in reserves further raises concerns about long-term financial stability, as reserves are a finite resource and their depletion could leave the council vulnerable to unforeseen costs as previously reported by council officials recently. Moreover, the proposed £2.9 million in savings, whilst not detailed publicly, may actually involve cuts to essential services or efficiencies that could prove politically contentious if they impact on residents’ quality of life.
Critics, including Conservative group leader Councillor Mike Young, argue that Labour’s freeze is a populist move designed to win voter favour after the 4.99% tax hike in 2025 drew criticism. Young's pointed out the inconsistency between Labour’s earlier insistence on tax increases and their current ability to freeze rates, suggesting that the government’s funding uplift might actually be only a temporary reprieve, rather than a structural fix. The opposition’s motion therefore seeks detailed financial projections to assess whether Labours Council Tax freeze is in fact 'viable', or whether it risks creating a budget deficit that a future administration (likely a Reform one) would then inherit.
Reform UK’s Rise and the Throston By-Election
The financial debate coincides with a shifting political landscape in Hartlepool. On July 10, 2025, Reform UK’s Ed Doyle won a by-election in the Throston Ward, securing 595 votes against Labour’s Mark Hanson (475 votes) and becoming the party’s third councillor for Hartlepool Borough Council. This follows Reform UK’s earlier success in May 2025, when Amanda Napper won another Throston Ward by-election with 889 votes, almost double the voters of her Labour contender. These victories signal growing support for Reform UK in Hartlepool, a town that voted overwhelmingly 69.6% to leave the EU in 2016 and has historically been part of Labour’s “Red Wall.” The loss of another seat therefore reduces Labour’s majority to just 22 out of 36 seats, making the May 2026 elections in Hartlepool a critical battleground.
Reform UK’s gains reflect voter frustration with both Labour and the Conservatives, particularly on issues such as council tax, local services, and the management of council finances. Ed Doyle’s campaign emphasised delivering a “fair deal” for Hartlepool, focusing on road maintenance, youth services, and value for council tax money. These priorities appear to be deeply resonating with local residents who feel neglected by successive administrations. However, Reform UK’s lack of a detailed policy platform for local governance raises questions about how the party would manage the council’s complex financial challenges if it were to gain control in 2026, with warnings already been sounded that any reform led council would almost immediately getting into power at Hartlepool Borough Council would focus their attention on Council Tax Support, perhaps seeing it chopped back to just 80% support.
Potential Budget Challenges for a Reform UK-Led Council
Should Reform secure a majority or form a coalition with the councils remaining number of Independent to lead Hartlepool Borough Council in May 2026, its claimed they would inherit a financial landscape significantly shaped by Labour’s current policies. The council tax freeze, whilst perhaps popular with residents, could in fact create significant budgetary constraints for a new administration.
Revenue Constraints from the Council Tax Freeze
By freezing council tax in 2026-27, Labour is said to be forgoing an estimated £2.6 to £3.0 million in additional financial revenue that a 4.99% increase would have generated (based on the 2025-26 figures). This decision limits the council’s ability to raise funds locally, making it heavily dependent on central government grants. If the government’s Fair Funding Review 2.0 fails to deliver sustained increases in funding, or if economic conditions worsen, a Reform UK-led council could face a huge shortfall that requires either service cuts or a reversal of the freeze—both politically risky moves.
Depleted Reserves
Labour’s use of £1 million in reserves to balance the 2025-26 budget reduces the council’s financial cushion. Reserves are critical for addressing unexpected costs, such as emergency repairs or other liabilities such as a natural disaster. A Reform UK administration would then need to heavily rebuild these reserves or risk financial instability, potentially necessitating unpopular measures like service reductions or future tax hikes.
Savings and Service Cuts
The £2.9 million in savings proposed for 2025-26 may involve efficiencies or reductions in essential services, such as street cleansing or child & adult social care services. If these savings are not sustainable or if they provoke public backlash, a Reform UK-led council could struggle to maintain service levels whilst adhering to its campaign promises of delivering value for money. For example, Doyle’s focus on youth services and road maintenance would require additional investment, which may be difficult to fund without increasing revenue or cutting other areas.
Central Government Dependency
Hartlepool’s financial stability currently hinges on the Labour government’s funding uplift and the ongoing Fair Funding Review. A Reform UK-led council would have limited influence over national policy, and any reduction in government support—whether due to a change in government or shifting priorities—could exacerbate budget pressures. This is particularly concerning given Reform UK’s lack of representation in Parliament, which limits its ability to advocate for Hartlepool at the national level, especially with a General Election not likely to be on the cards until 2029.
Public Expectations and Political Promises
Reform UK’s campaign rhetoric emphasises delivering “real action” and addressing local issues and infrastructure. However, the party’s inexperience in local governance and the absence of a detailed fiscal strategy could lead to challenges in meeting these expectations. If a Reform led council inherits a constrained budget from Labour, it may struggle to fund promised initiatives without raising Council Taxes or cutting services, risking voter disillusionment...
The Road to 2026
Labour’s council tax freeze does appear to be calculated move to regain voter trust after the 2021 by-election loss and years of perceived mismanagement under a Conservative-Independent coalition. Jonathan Brash’s advocacy for council tax reform and Brenda Harrison’s leadership have positioned Labour as responsive to residents’ financial burdens. However, the loss of two Throston Ward seats to Reform UK in 2025 suggests that voter sentiment in Hartlepool remains particularly volatile, particularly in a town with a history of swinging between Labour and other parties. The 2021 parliamentary by-election, won by the Conservatives’ Jill Mortimer, and the 2024 general election, which saw Brash reclaim the seat for Labour, underscores just how volatile Hartlepool’s status is as a political battleground & how Labour is now desperately trying to hold onto the town by any means possible.
Reform UK’s growing presence, with two councillors now on the council & a third coming from a political defection from the Conservatives, positions it as the party to beat in the 2026 elections. Reform's anti-establishment messaging and the focus on local issues appears to be appealing to voters in Hartlepool seemingly frustrated with Labour’s tax increases and the Conservatives’ financial track record. However, Reform's ability to translate by-election wins into a council majority will likely depend on its ability to articulate a clear vision for governance, particularly on complex issues such as budgeting and service delivery.
Labour's taking a sledgehammer to the councils finances, leaving a potential Reform council in 2026 to pick up the pieces.
Hartlepool Borough Council’s financial position may have reportedly 'improved significantly' since Labour’s dire warnings of a £16.5 million shortfall back in January 2025. However, this was largely due to increased government funding, however, its claimed a large portion of this got used up to pay for the local government pay increases seen across the councils workforce. Labours proposed council tax freeze for 2026-27 is a risky move & comes with huge risks that could haunt a future elected administration. If Reform UK were to lead the council after May 2026, it would face the daunting task of being left lumbered with balancing ambitious campaign promises with a budget constrained by limited revenue, depleted reserves, and reliance on central government support all due to Labours bid to seemingly 'win votes'.
The motion raised by Independent and Conservative councillors highlights legitimate concerns about the transparency and sustainability of Labour’s financial strategy. For Hartlepool’s residents, the key question's going to be whether the council tax freeze actually represents 'genuine progress' or a temporary reprieve that could lead to tougher choices down the line. As the 2026 elections approach, all parties—Labour, Reform UK, Conservatives, and even Independents—must present clear plans to ensure Hartlepool’s financial stability whilst addressing the town’s pressing poverty issues. For now, however, it seems the rise of Reform UK and Labour’s financial gamble has set the stage for a contentious and high-stakes political year ahead.
