Council facing £8.7m overspend, report says

A council is forecast to be making a multi-million pound overspend by the end of the financial year, according to a report.

Middlesbrough Council is currently predicted to spend £8.7m more than its £200m budget by March 2027, the authority's routine quarterly forecast showed.

However, the council's executive member for finance Nicky Walker said work was being undertaken to reduce expenditure. The authority said last financial year ended with a £1.8m overspend, a much reduced figure on what was forecast at this time in 2025.

Walker said the most significant pressures were in children's care due to agency staffing, an increased number of children being looked after and emergency resource workers.

The council does not think the forecast overspend will be the same by the end of the financial year, according to the Local Democracy Reporting Service.

Walker said: "I can't remember a year where it ever has remained the same."

She said in recent years, the number of looked after children had not fluctuated greatly, but over the last 12 months, there had been an increase from 493 children in June 2025 to 541 in June 2026.

She said "improved practice" can bring financial benefits in the department, but such benefits were not expected immediately, so savings will not be seen quickly.

Addressing the level of council reserves papers read at the meeting stated: "The current forecast overspend if not addressed will impact on the level of usable unrestricted revenue reserves and would impact on progress towards achieving the council's preferred financial resilience targets as set out in the reserves policy.

"This reinforces the need for immediate action to reduce forecast overspends and protect reserves."

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