Halton Council is set to go almost £20m over budget this year unless urgent action is taken.

The authority’s ruling executive board has been warned that the situation is of ‘great concern’ and that measures to reduce outgoings must be taken ‘immediately’. The overspend as of the end of July was £6.561m but could rise to £19,777m by the end of the year if no action is taken.

A report to the board said the government has been made aware of the council’s financial position and that the Local Government Association – the the national membership body for local authorities – had agreed to conduct a review of the council’s finances.

The biggest source of over-spending is its troubled Children and Families Department, which was recently slammed as inadequate by Ofsted.

Its net spend this year is forecast to be £8.771m over last year, a hike of more than a fifth. The overspend is partly to do with the cost of hiring temp social workers. The situation is similar to last year, with the same department driving much of the overspend which at one point was more than £10m, which was also largely blamed on the cots of hiring temp staff.

The current number of agency staff within the department is 63 but expected to rise to 72 in future months. The report said work was underway to reduce the ongoing reliance on agency staff, including the launch of a recruitment working group, a new in-house 'Social Work Academy', and recruitment and retention bonuses.

The cost of supporting children in residential care had also gone up due to a hike in the price of care packages and the complexity of support the young people required.

The report said: "The forecast overspend is significantly above that which has been recorded in recent years. Whilst the current year net budget for the council has increased by £7.7m, this is well below the forecast increase in costs, currently estimated as an increase of £21.868m."

It recommended that all spending should be limited to only absolutely essential items, that executive directors continue the 'urgent action' to identify areas where spending can be reduced or suspended for the remainder of the current financial year or additional funding secured.

The overspend piles more pressure on the council's already stretched finances. It is currently part way through a three-year programme of cuts and restructuring which have included the closure of Ditton and Warrington Road Daycare Centres, and the planned closure of the council-run school meals service. Council Tax payers have also been hit with a succession year-on-year  five per cent hikes - the maximum allowed without triggering a local referendum.