Hampshire County Council ‘left with no choice’ but to consider council tax hike, says leader Cllr Nick Adams-King

CASH-strapped Hampshire County Council could slap its residents with a huge 15% council tax increase if the government agrees to its plans.

With a £182million deficit, cuts in all service areas, and the use of reserves to fill gaps, leader Cllr Nick Adams-King said the authority had submitted a request for exceptional financial support (EFS) to the government for 2025/26.

EFS is a form of temporary financial assistance provided by the UK government to local authorities that are facing severe financial difficulties, with Southampton City Council already getting help in this way.

The county council’s EFS request is to raise its share of the council tax by 10% more than the usual maximum, which would mean any increase could be as much as 15%.

While a rise of more than 5% would usually trigger a referendum, it can be rolled out without one if the council has government permission.

Hampshire has the second lowest council tax level of all counties nationally, having previously frozen it for five years between 2011/12 and 2015/16.

Since then, it has increased council tax by the referendum limit every year.

The 15% rise in 2025/26 would be worth around £84m, the council said.

Council tax is split between the following authorities; Hampshire County Council, which has a £110.96m share, police and crime commissioner £18.92m, New Forest District Council, £14.46m, town and parish councils £8.39m, and Hampshire and Isle of Wight Fire and Rescue Service, £6.00m.

For an average Band D property, the annual council tax for 2024/25 is £2,193.24, with Hampshire County Council receiving £1,312.32 (59.8%), the police and crime commissioner £261.46 (11.9%), NFDC £199.79 (9.1%), Hampshire and Isle of Wight Fire and Rescue Service £82.84 (3.8%), town and parish councils an average £115.91 (5.3%) and adult social care £220.92 (10.1%).

In a letter to county councillors, the authority’s chief executive Carolyn Williamson said that the EFS request is a “proactive, pre-emptive step” by the council to secure “greater resilience”.

She said that the EFS comes alongside the council’s intentions to “return to our core purpose” by delivering legal minimum service levels, ongoing spending controls, and “enlisting an independent panel of experts last year to challenge and support us”.

She added: “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 the letter, she said the council “reassuringly” had enough reserves to plug the 2025/26 budget gap, but by 2026/27, the prospect of a Section 114 notice – effectively declaring bankruptcy – “becomes a real possibility if there are no deep-seated changes to the way local government is funded”.

Cllr Adams-King said that despite trying to engage with the government about the council’s financial situation and asking for a meeting to discuss a “positive way forward”, he had been “ignored”.

Although the council “does not” want to raise the council tax above the 5% threshold, he said they are “left with no choice” but to ask for government help because “it is all they have asked us to do after finally replying to our letters calling for a meeting”.

He added: “This does not mean that we will increase council tax by the full amount over the referendum limit. It simply means that, if granted, it would give us choices.

“However, the government has said it will take money from shire counties like ours and give to councils in the midlands and north. It has burdened us with increased costs via employer national insurance and living wage increases we will not get back in full. The situation is now much worse.

“The government, it seems, is happy to use Hampshire County Council as its backdoor tax-raising vehicle as it grapples with an economic mess of its own making. This is unfair but if we are to continue to provide the services we need, and our residents tell us loud and clear they want, then there is no choice but to ask for the one-off 10% increase for the next year.”

Cllr Adams-King said the county council was “well run”, with the second lowest council tax nationally.

He added: “We seek this increase only due to the rising costs of social care, special educational needs and those increased costs and lack of funding from the government. We have used our reserves to balance the budget so far but this is not sustainable.”

This week, the council sent the government further requested information to help them decide whether Hampshire County Council should be included on the government’s list of approved local authorities to receive EFS.