The Authority's Medium-Term Financial Strategy (MTFS) shows the County Council is facing a budget shortfall of almost £199 million in 2027/28. The report explains that the scale of the challenge means the gap cannot be closed without some form of Government support.
The strategy builds on Hampshire's long track record of planning ahead and managing public money carefully, while continuing to prioritise support for vulnerable children and adults, maintaining roads, providing school transport and delivering other key services.
By March 2028, the County Council will have delivered £770 million of recurrent savings over twenty years whilst maintaining Council Tax rates at one of the lowest in the country and continuing to provide essential services that remain independently rated as high performing. Hampshire's Children's Services are rated Outstanding by Ofsted, Adult Social Care is rated Good by the Care Quality Commission, and the Government has given Hampshire an overall amber rating for local road maintenance, including a green rating for the condition of its roads. Hampshire's strong financial management has also been recognised through repeated independent reviews.
The Authority has already taken extensive action to reduce costs, improve efficiency, generate income and transform the way services are delivered in a bid to help balance annual budgets. Reserves have also been used carefully over many years to help protect frontline services from the impact of rising costs and demand. However, despite these efforts, the gap between the cost of providing services and the funding available to pay for them continues to grow, and there are no longer enough reserves to help bridge the anticipated budget gap for 2027/28 and beyond.
Like many councils across the country, growing numbers of people require support from County Council services, particularly for vulnerable children and adults, people’s needs are more complex, and costs continue to rise. At the same time, Government grant funding to the County Council continues to fall. In addition to the £10.9 million reduction this year, £17 million in 2027/28 and £15 million in 2028/29, the total reduction by 2028/29 will be £42.9 million per year.
With almost 90% of Hampshire’s budget spent on high-demand services such as social care and waste disposal, there are limited opportunities to close a funding gap of this scale through local action alone.
The MTFS does not make decisions on how the budget gap will ultimately be addressed. Rather, it highlights the scale of the challenge facing Hampshire and the difficult choices that are likely to lie ahead as the County Council works towards setting a balanced budget for 2027/28 in February next year. These could include identifying further efficiencies, generating additional income, continuing to transform how services are delivered, seeking greater flexibility from Government around council tax, and considering other financial measures available to local authorities.
Leader of Hampshire County Council, Councillor Nick Adams-King said: “Residents rightly expect us to spend their money wisely. Hampshire has a strong record of doing exactly that: planning ahead, delivering substantial savings and changing how services work, while maintaining high-quality support for the people who need us most. Independent reviews have repeatedly recognised both our financial management and the quality of our services.
“But residents also deserve a clear explanation of why the financial gap continues to grow. Every month, around 45 more older residents need our help paying for care after their own savings run out. More children and adults need increasingly complex support. These are essential responsibilities, and we cannot simply turn people away. The Government’s increase in employers’ National Insurance has added further costs for care providers, feeding through into the fees councils must pay.
“On top of that, the Government’s so-called Fair Funding changes will remove around £28 million from Hampshire’s funding in 2027/28, widening the shortfall we must address. There is nothing fair about taking money away from Hampshire while the number of people needing our help continues to grow.
“We will keep challenging costs, finding savings, generating income and improving how we deliver services. But we must be honest: a funding gap of almost £199 million cannot be closed through efficiencies alone, and reserves can only be spent once.
“Government determines the services we must provide, controls much of our funding and restricts how we can raise income. Ministers must now play their part, with a fair, sustainable funding settlement and the freedoms to reform services and generate income locally.
“We will set out the choices openly and listen to residents before decisions are made. Our responsibility is to protect essential services, manage public money carefully and stand up for Hampshire. That is exactly what we will continue to do.”
Residents, businesses, community groups, partner organisations, and other stakeholders will be invited to have their say on ways the County Council could help balance its budget for 2027/28 when a public consultation launches on 2 November 2026. Feedback received will help inform proposals ahead of final budget decisions due in February 2027.
Following the launch of the public consultation on 2 November 2026 inviting views on ways to help balance the County Council’s budget, the MTFS will be scrutinised by the cross-party Corporate Services and Resources Select Committee on Friday 6 November with recommendations made to Cabinet for their consideration on 10 November.