Spiralling numbers of children in care are continuing to put pressure on Blackpool Council's budget with overspending in Children's Services expected to be nearly £4.2m during this financial year.
A report to the council's executive says the number of looked after children reached 554 in June, while children with complex needs are costing the authority an additional £700,000 compared to expected.
READ MORE HERE: Number of children in Blackpool Council care 'still too high'
The report says measures are being adopted to bring spending down but warns the rising cost of children's services is a national crisis.
However Blackpool is being hit harder than most.
While spending on children's social care nationally represents 18 per cent of total council spending, in Blackpool the figure is 25 per cent.
The report says: "It is apparent even at this early stage of the financial year that the demand pressures being met by Children's Services are once again the primary challenge facing the council in its attempt to balance its budget in-year."
At the beginning of the financial year, the overspend was forecast at £2.2m, but this has spun out of control due to several reasons.
These include "the breakdown of a number of existing placements" which "has also contributed significantly to the higher forecast overspend".
Meanwhile costs "attributable to children with complex needs being moved into more expensive placement categories, requiring additional support or being unable to step down as early as planned, amount to more than £700,000."
But work has been done to put some young people into lower cost placements, while others have been resettled with their families "wherever this was appropriate and safe".
A new role has been created to scrutinise the cost of the most expensive external placements.
Last year Children's Services overspent by £5.8m, also due to the increase of the number of children in care which peaked at 549 during that financial year.
By the end of March the numbers had reduced to 529.
Cash from the council's reserves was used to reduce last year's overspend to £3.3m.
The report is part of the monthly financial update which will be considered by the executive when it meets on Monday.