County Council asks Government for go ahead on next steps to bring greater financial stability

Next steps by Hampshire County Council towards helping the Authority to secure greater financial stability have progressed this week, with a request sent to Government to potentially increase council tax by more than the referendum limit in Hampshire from April this year

Jan 15 2025

In line with plans approved by Councillors in the autumn last year, the County Council wrote to Ministers to request Exceptional Financial Support (EFS) for 2025/26, by allowing the Council to increase council tax by a further 10% above the 5% referendum limit, to a total of 15%. This week, the Council has sent Government further requested information to help them decide if Hampshire County Council should be included on Government’s list of approved local authorities to receive EFS. 

The move comes as part of ongoing efforts by the Authority to balance the budget in future years amid rising costs and demand pressures, particularly around social care for vulnerable children and adults plus the absence of a favourable financial Settlement from Government at the end of last year which has also added more pressure to the County Council’s already very difficult budget position in future years. 

Hampshire has the second lowest council tax of all counties nationally, so by asking Government to allow the County to increase council tax by 10% above the national 5% referendum limit for 2025/26, it could generate an extra £84m – close to the amount of income the Authority has lost out on after years of freezing council tax in line with the previous Government’s policy and the erosion of funding from Government over time. 

Hampshire County Council Leader, Councillor Nick Adams-King said: “This EFS request is very much a proactive, pre-emptive step to secure greater resilience for the County Council. It reflects Hampshire’s ongoing strong financial management and pledge to leave no stone unturned and an unrelenting focus to position the County Council on a more sustainable financial footing for the future. It also builds on our continuing work to return to the delivery of our core services, driving down spending across the board, and the challenge and support of an independent panel of experts last year. They too have reached the same conclusion as we have, that despite being a well-run, high performing Council that manages its resources with the utmost care and precision, we can no longer make enough savings and still deliver our statutory responsibilities in future. They have provided us with a full written report on their findings, which will be published as part of our upcoming Budget papers next month. 

“Reassuringly, the County Council does have enough reserves to balance the budget for 2025/26, but that does not offer a long-term solution, particularly as our years of efforts to press Government to make major changes to how local government is funded and allow us greater freedom to set council tax have been fruitless. If Government doesn’t allow us to increase council tax above the permitted 5% national referendum threshold, we will then need to think deeply whether or not to progress with a local referendum which seeks residents’ views on a potential 15% council tax increase from April this year.

“While we wait for Government’s view, we have no other choice than to continue to explore deeper savings proposals throughout this year which would aim to scale back local services to our core duties.”