Sunderland's struggling children's services organisation spent £7.7m on temps in a year it has emerged.
Alex Hopkins, the man brought in to lead the turnaround of the service after 2015's Ofsted fiasco, has also resigned.
The watchdog rated the department and the authority’s safeguarding section as ‘inadequate’ in a report issued in July that year.
Sunderland City Council’s cabinet later agreed to establish a company to deliver children’s services on their behalf, with Alex Hopkins leading the organisation Together for Children.
Now an investigation by the BBC has found that the organisation, which took over the running of services in April, have revealed the vast amount spent on agency temps.
Following a Freedom of Information request, the trust disclosed it spent £7.7m on temporary social workers in the 2016/17 financial year.
The group defended its spending as part of its efforts to raise standards.
Newcastle City Council spent just under £157,000 during the same period and the 11 North East councils, excluding Sunderland, spent a total of £8.1m.
A spokeswoman for Together for Children said: "The shortage of qualified social workers is a national issue which is going to take time to resolve but we have invested significant resources in a bigger workforce, with smaller caseloads, good supervision, and smaller teams.
"Following the 2015 Ofsted report, we had to expand the workforce to actively and effectively tackle the issues identified by Ofsted. The national shortage of social workers meant that it was necessary to recruit a higher percentage of agency workers to support the required improvements.
"Together for Children began delivering children’s services on behalf of Sunderland City Council in April 2017 and has an active and on-going social worker recruitment programme.
"Seventy-two new permanent members of staff have joined Together for Children since the company launched in April, 44 of these in social care, with another 11 due to start by the end of January.
"Since the company’s launch in April, the number of permanent social work staff has increased by 17% and the annual turnover of social care qualified workforce is now lower than the national average.
"Ofsted have carried out five monitoring visits to the city since July 2015 - and have reported steady or sustained progress being made after each and every one.
"In the latest Ofsted monitoring visit to the company in October, inspectors noted that Together for Children is ‘making sustained progress in improving services for children in need of help and protection’ adding that they have seen ‘positive steps in recruitment to the new company’.
"As part of the monitoring process Ofsted inspectors spoke to social workers - as well as parents and carers, managers and advance practitioners and partner agencies.
"And the feedback they got was social workers reporting that they feel more supported, and children, parents and carers speaking positively about the support they receive from social workers which is a big step forward from where we were in 2015.
"Despite a continuing reliance on agency staff, they also found improved stability in teams at both social worker and managerial level and a wide range of training available, including a management development programme.
"While we very much recognise that there is still much to be done, we have seen some really significant key improvements including:
"A reduction in the number of unallocated cases from 269 at the time of the 2015 inspection to just 1 at the end of September 2017.
"Average caseloads down to 17 in September 2017 against a target of 20.
"98 per cent of child protection visits completed in ten working days in September 2017, compared with 55 per cent completed in 28 days in 2015."
Following the departure of Alex Hopkins, Sue Carty, Together for Children’s Director of Performance and Quality has taken on the role of Acting CEO while we appoint to the permanent position. Statutory DCS functions are being covered on an interim basis by Fiona Brown, Executive Director of People’s Services.
Irene Lucas, Chief Executive of Sunderland City Council, said: "Alex Hopkins, Director of Children’s Services, and Chief Executive of Together for Children, has resigned from his employment. I would like to thank Alex for his work with us in Sunderland.
"The Council and Together for Children have interim arrangements in place and I wish Alex well for the future."
Sunderland Conservative spokesman, Coun Robert Oliver said: "The enormous cost of employing agency social workers is further evidence of the deep damage the collapse of Children's Services is doing to the finances of the council.
"With Together for Children still rated as inadequate by Ofsted it will be an uphill struggle to recruit a permanent workforce capable of turning the department round."
Liberal Democrat Coun Niall Hodson said: "This is yet another staggering revelation about Sunderland Council's failing Children's Services department.
"Nothing can be more than important than the safety of vulnerable children in our city, so it's about time the Council's leadership - and the Government if necessary - got a handle on yet another crisis.
"Losing the person hired to turn around the failing Department is a bitter blow. The huge bill on temporary workers is also shocking - but sadly not surprising given the difficulties in recruiting full-time staff to work in this hugely challenging area.
"The sooner the Council's leadership gets a grip on this seemingly never-ending crisis, the sooner our children will be better protected and the sooner funding on temporary workers and crisis management can be more effectively spent by the Council."