Social services in Brighton and Hove are facing their biggest-ever cash crisis, its director admitted today.

Allan Bowman said Government funding was not recognising the special needs of urban areas like Brighton and Hove with their inherent social problems. He added: "This is the most difficult budget I have ever had to manage in my 29-year career. The prospect of an overspend is very real. Hopefully we will not run out of money but we will have to manage our budget more efficiently than ever. We will have to lobby for improvements."

Mr Bowman said he and every member of his staff will have to "pull together" if the department is to cope this financial year. He said there were no plans to close homes or reduce services but he added: "I cannot say it will not increase waiting lists." He vowed: "We will spend whatever is needed to maintain services and we will worry about the money later."

Mr Bowman said increased Government funding added only a few hundred thousand pounds to social services' £58 million budget this year and the department is already spending 50 per cent above Government guidelines.

The increase amounted to just a "drop in the ocean", he said, adding: "There simply is not enough direct funding." His department currently is talking to colleagues in the health service to see if it can share some of the recent cash windfall announced for the NHS.

Publicity about child care issues recently had increased workloads but Mr Bowman said: "If this means we can protect more children, then we are pleased."

He admitted a possible public inquiry into the town's child cruelty case would increase the financial burden. He said: "I do not believe we would learn any more from such an inquiry, but we would co-operate if one was ordered."

Staff wrote anonymously to the Argus expressing concerns about low morale, job security and whether resources were enough to protect children and adults in need. Mr Bowman said a staff survey, conducted in conjunction with the union UNISON, revealed worries about the ability to do the job properly.

"Staff needed to feel better-supported and some answers revealed the stress of doing the job with increasingly limited resources and growing demand."

But, he said, some answers were positive and showed the level of his staff's dedication.