Darlington Council has warned of a ‘black hole’ in its finances as cuts to local services have been made in a bid to raise much-needed money.  

Amid an escalating crisis for local government after years of inflation and budget cuts, the local authority is cautious about its finances and has stressed the need for stability. 

Leadership of the council was taken over by a Labour and Liberal Democrat coalition in May after four years of Conservative rule. Yet residents have been told the authority is struggling to cope due to funding cuts enforced by the government. 

And Council leader Stephen Harker says its financial position is even worse than first predicted. 

The current leadership has faced criticism from opposition councillors for cancelling schemes such as the town’s fireworks display and free parking, but they insist it is the right move for the future. 

Darlington and Stockton Times: Darlington Council Leader and Labour member, cllr Stephen Harker Darlington Council Leader and Labour member, cllr Stephen Harker (Image: SARAH CALDECOTT)

Cllr Harker said the previous Labour administration, which was voted out in 2019, balanced the finances but said the Conservative council “created a blackhole”. 

He added: “They knew that they needed to take action. But they didn’t. In 2023 they set a four-year budget that would overspend by over £7.5m per year and see the council run out of money.”

The current administration has instead opted for stability said Cllr Harker, who added: “As a responsible and prudent administration the Labour and Liberal Democrat partnership has sought to really understand the council finances before rushing into ill-thought out cuts we would later regret.

“We are sorry to say that after being able to inspect the council’s finances more closely, they are even worse than we feared.”

But Conservative group leader Jonathan Dulston praised his colleagues' work to support vulnerable residents by building up reserves of more than £23 million. 

He said: “It’s disappointing to see that Labour don’t have a financial plan of their own and have decided to run with the budget we set for this year instead of producing their own emergency budget.”

The local authority’s children’s services are hardest hit, with a predicted overspend of more than £4 million at the end of the financial year - £1.6 million more than first predicted.

Council officials have warned the increase in demand and subsequent cost pressures are of ‘significant concern’ and will be monitored closely. The amount of children in care has increased by 33 per cent from pre pandemic levels.

The pressures are in line with a national trend, councillors have been told.

“We are lobbying government and have provided evidence to the Local Government Association to demonstrate the issues and disproportionate strain on Darlington’s finances in this one area,” a report added. 

About £300,000 is expected to be raised by reintroducing parking charges in the town centre, after the previous Conservative-led administrations scheme was scrapped earlier this year. 

And figures have shown the impact of removing the parking offer has not seen as high a reduction in income as was estimated.

Yet members have warned they cannot be complacent and further challenges lie ahead, including high inflation, interest rates and energy costs. 

Cllr Mandy Porter, cabinet member for resources, said: “We are reviewing all our services looking to see what efficiencies can be made and how we can generate additional income to protect our services to the public as far as possible.”

It is feared the black hole the Conservatives created is growing, Cllr Harker added. 

“This year we will seek to make the best possible savings we can, through efficiencies and generating income, while protecting vital services.”

Residents are due to be consulted on further cost-cutting measures next year.