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North East councils need to rebuild their social services while balancing the books: it won’t be easy

Analysis by Ray Casey

Ray Casey by Ray Casey
18-09-2026 07:30
in North East, Politics
Reading Time: 12 mins read
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Redcar and Cleveland Civic Centre

The civic centre in Redcar where Redcar and Cleveland Council is administratively based. Picture/credit: Teesside Live.

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In the wake of the horrific crash on the A66 near Middlesbrough on 22 August, and the fatal Grangetown fire four days later, there have been calls for crackdowns on youth crime and antisocial behaviour throughout Teesside. The deaths of PC Matty Blades and PC Tom Clough, in particular, have left people shaken. But we need to keep in mind that the two police officers weren’t the only ones who died in that A66 crash in August 2026. Five other young men died too.

Easy answers

So first of all, let’s get the usual knee-jerk reactions out of the way. These invariably involve harsh punishment of “youth offenders”. They include variations on the theme of reintroducing National Service, building boot camps, longer prison sentences, and, in some cases, bringing back corporal punishment, including the birch.

We’ve been here before

The 1979 Conservative Party manifesto proclaimed: “In certain detention centres we will experiment with a tougher regime as a short, sharp shock for young criminals. “Short, sharp shock” was already such a cliché that Pink Floyd had satirised it seven years earlier. But Medomsley Detention Centre in County Durham had already been operating such a regime well before that. Since 1961, in fact. Young men, often guilty of low-level crimes, faced beatings, scalding hot baths, and forced exhausting runs, the moment they arrived. Medomsley effectively operated beyond the reach of the law.

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Thousands of victims

Thousands of young men were traumatized at Medomsley, often developing PTSD. Several committed suicide. One staff member alone, Neville Husband, sexually abused hundreds of them. Margaret Thatcher must have known that a short, sharp shock regime had already been destroying lives in County Durham for 17 years before she promised such a scheme at the 1978 Conservative Party Conference. The abuse would continue unabated until 1987. So much for the short, sharp shock.

A humane approach

We need an effective penal system, but the focus has got to be on keeping people out of it in the first place. But, as Sarah Sinclair asked for the Teesside Lead on 13 September 2026, how do we recognise which of those causing the trouble may actually be in trouble themselves? Lindsay Dalton, CEO of the Ivison Trust noted that something that might present as antisocial behaviour might actually be hiding a vulnerable child who’s been exploited. This follows on from James Waterson’s excellent report for North East Bylines four days earlier. Children are being groomed and exploited without even being aware of it. Their groomer is promising status that the young person can’t find outside of the criminal community.

How do we break the cycle?

We need to keep young people away from crime by providing support to them and their families. Somebody replied to one of my social media posts on this subject, complaining that I hadn’t mentioned the failure of parenting as a cause of the A66 crash. This is another lazy trope. The causes are far more complex.

Domestic violence

One in five children in the UK experience domestic violence. Of these children, the majority are directly harmed by the perpetrator. Children who live in the most deprived 10% of neighbourhoods have a 10 times greater chance of being on a child protection plan than children in the least deprived 10% of neighbourhoods. As I reported here, the two places impacted by those terrible events in Teesside in August 2026, South Bank and Grangetown, are among some of the most deprived communities in the UK.

Family break up

In 2024-25, more than 81,000 children in England were in the care of their local authority, with two thirds removed from their birth families because of abuse or neglect. For those children taken into the care system, they’ll hope that they’ll be placed in a stable fostering relationship. But the number of approved foster carers in England dropped by roughly 12% between 2021 and 2025 alone, falling from 63,890 down to 56,345. In February 2026, the UK Government pledged to find 10,000 new places. It’s a start.

Care cliff edge

As reported here, children leaving the care system aged 18 are in peril of falling off the “care cliff edge”. Their death rate is three or four times higher than the general population. They’re nine times more likely to be homeless than average, and 50% of them will have a criminal record by the time they’re 24 years old. Almost 40% of care leavers are likely to be NEET (not in education, employment or training).

Entrenched issues

I’ve identified some of the complex and entrenched issues that policymakers need to address in order to get us out of our impasse. Several days after the incidents in South Bank and Grangetown, Councillor Alec Brown, the leader of Redcar and Cleveland Council, commented on the horrific events that had happened within his borough. Somebody from No.10 Downing Street had just called. Here’s part of Alec Brown’s social media post:

That’s a result

That post was sent on 5 September. Ten days later, on 15 September, it became clear that the Prime Minister was listening. Alec Brown announced that the Ministry of Housing, Communities and Local Government had made emergency allocations to 14 local authorities to enhance and protect social services, including £4.8mn to Redcar and Cleveland Council.

Fixing the problem

So, this patches one problem in a handful of local authorities. Andy Burnham has got to make a start undoing sixteen years of austerity. Most of this was inflicted by the Lib Dem/Conservative coalition from 2010 to 2015, but it continued during the Conservative Government from 2015 to 2024. Some would argue that Keir Starmer and Rachel Reeves kept austerity going. Will Andy Burnham and John Healey begin the repair job in the October budget? We’ll soon know. But the austerity years have weakened many council finances to the point where they can only manage their statutory duties. I’ve listed these five statutory duties, and the financial pressures on councils to fulfil them:

Social Services

Caring for and protecting children, older adults, and disabled people (adult and children’s social care). Analysis for Sky News by the Chartered Institute of Public Finance and Accountancy (CIPFA) shows that 78% of local authority net revenue expenditure (NRE) is spent on social services.

Help the Aged

Private companies run 83% of elderly care homes. So most of the fees paid by local councils go to private companies, which often use complicated corporate structures to disguise their profits.

Think of the children

According to the Office for National Statistics, the majority of children’s homes are privately owned. This trend has continued to grow steadily and reached 85% (4,090) in 2026. Children’s social care cost local authorities £16bn in 2025/26. This is especially pertinent, given Alec Brown’s recent conversation with Downing Street. Redcar and Cleveland witnessed some tragedies in August, and the Prime Minister’s exceptional financial intervention on 15 September was welcome. But it runs the risk that other local authorities will plead special circumstances too.

Education

Providing schools, special educational needs (SEND) provision, school transport, and early years education. CIPFA’s analysis showed that SEND related deficits have reached new records and are, on average, 20 times the size of councils’ unallocated financial reserves. SEND deficits on average now equal 94% of unitary authorities’ allocated reserves. The Alliance for Inclusive Education (ALLFIE) has reported that a small number of private companies are making tens of millions of pounds annually from SEND. The cost of transport to these private schools costs £2bn per year alone.

Housing

Managing homelessness applications, providing statutory housing advice, and maintaining council housing standards. In England, the bill for managing homelessness escalated by 25% in just one year, from 2024 to 2025, and now runs at £2.8bn. Almost £2bn of this is paid to private companies, for either emergency B&Bs, or nightly paid self-contained accommodation.

Highways and Transport

Maintaining local roads, managing traffic flow, and winter road gritting. Road gritting usually costs about £200mn per year. But it’ll cost a lot more this winter, as the price of diesel heads towards £2 per litre.

Waste Management

Collecting household waste and recycling, and providing waste disposal facilities. Most local authorities are locked into long-term contracts to collect waste and incinerate it. Let’s take Durham County Council as an example. In 2025/26, the authority spent £43mn on waste management. Durham is unusual in that its bin collections are “in-house”, but it still spent £16mn on bin collections last year. The council pays private contractors Suez and Biffa £27mn each year to either incinerate or sort its waste.

Pressure on overall budgets

So, if we continue to use Durham County Council as an example, we can see the difficulties that will face all local authorities as they set their budgets for 2027/28. On 10 September 2026, the council announced that there’ll be a deficit of £84mn over the next four years. Savings of £23mn will need to be identified in 2027/28 alone. But, looking at the five statutory duties listed above, there are no savings to be had, because contracts are locked in. Durham, and every other council, sends billions of pounds each year to very profitable private companies. And, unless there are massive policy changes at a national level, there’s nothing they can do about it.

But it’s a lot worse than that

Forget about savings, the costs are going up. Elderly care costs will continue to increase above inflation due to the increase in that demographic. We know that child costs, particularly SEND provision, are increasing almost exponentially. And the increase in the cost of emergency accommodation for homeless people shows no sign of abating.

It wasn’t big, and it wasn’t clever

In 2025/26, in an act of reckless political bravado, Reform UK-led Durham County Council set the core council tax increase to zero. The bills still went up, however, due to the 1.99% social care precept. Finance chief Darren Grimes helped to balance the books by scrapping the council tax exemption for low-paid workers. Most residents now pay at least 10% of their council tax bills.

What’s next, Darren?

Could Whitehall bail out local authorities? Well, the recent increase in bond yields caused by the Iran War has just obliterated John Healey’s fiscal headroom, so that’s unlikely. Back in Durham, Darren Grimes may be tempted to go back for more of that council tax exemption in 2027/28, hoping that some of the poorest people in the country won’t notice that his party has just been gifted £72mn by crypto billionaires. But it won’t close the gap much on that £23mn shortfall. Maybe we’ll have a mild winter in the North East, so Durham won’t have to send out the gritters as often as usual. In reality, Durham County Council is going to have to substantially hike council tax in April 2027. If it lasts long enough to set a budget.

Thanks to James Waterson for providing additional research for this article.

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