A Labour council is accusing the Local Government Secretary Steve Reed of favouring a neighbouring Reform-led council, according to a letter leaked to the New Statesman.
The letter is addressed to the secretary of state on Friday 13 February 2026 and signed by Hartlepool Borough Council’s Labour councillors, including the council leader Pamela Hargreaves. It outlines the funding pressures of exceptionally high rates of children in care and a “constrained” council tax base.
It warns that its funding settlement from Reed’s department, the Ministry of Housing, Communities and Local Government, “leaves Hartlepool in a position that is neither practically nor financially sustainable”.
The letter draws a direct comparison with the bordering council of Durham County Council, which is run by Reform. “Durham, controlled by Reform, has received an additional £3.7 million, enabling it to reduce a planned Council Tax increase from 3.1 percent to 1.9 percent. Hartlepool, a Labour-led authority grappling with exceptionally high levels of children in care, received no comparable support after requesting £3 million to stabilise essential services.”
While the authors of the letter “do not begrudge any authority the funding it receives”, they are finding it “hard to explain to our residents why a Reform-controlled council is given flexibility that eases pressure on bills, while a Labour council facing acute social care demand is left to consider raising council tax further in one of the highest taxed towns in the country. The optics and the substance both raise serious questions about fairness.”
Hartlepool, a deprived town in the northeast of England, has one of the highest council tax rates in the country and is grappling with a £6m overspend in children’s social care. The town is also symbolically significant for the Labour Party: Keir Starmer nearly resigned as leader of the opposition when Labour was defeated in a by-election there in 2021 – the first Conservative win in the constituency since its creation. Reform came a healthy second to Labour in the seat in the 2024 general election.
“We rebuilt locally after the 2021 by-election through sustained effort on the ground alongside the national party,” write the councillors in the letter. “That progress is now at risk, not through lack of work or commitment, but because the [funding] settlement leaves us exposed.
“The strength of feeling within our group is considerable, and it is becoming increasingly difficult to defend a position that appears to place communities such as ours at a disadvantage.”
In the letter, Hartlepool’s Labour councillors ask Reed to “set out clearly” the thinking behind Hartlepool Borough Council’s final funding settlement, arguing that the government’s “funding framework does not adequately account for concentrated need”. They also request “targeted or transitional support” to budget for children’s services and “ensure that fairness is seen to be done”.
The New Statesman has contacted the department for a response.
After publication, a spokesperson for the Ministry of Housing, Communities and Local Government commented:
“We inherited an outdated and unfair funding system and we’re taking action to fix this, making almost £78bn available for council finances next year including over £143m for Hartlepool.
“We are delivering fairer funding, targeting money where it is needed most through the first multi-year settlement in a decade, giving councils greater certainty to plan and invest for the long term.”
[Further reading: Britain is getting poorer, and angrier]
Content from our partners
Related
Join the debate
Subscribe here to comment