Government Blocks 15pc Council Tax Hike for Hampshire Residents
Hampshire County Council’s request for a 15% tax hike was denied by the government, leaving them in a tough financial spot.
Hampshire, Council Tax, Government, Budget, Financial Support
Hampshire: The government has blocked a proposed 15% council tax hike for Hampshire County Council. This decision leaves the council in a difficult financial situation.
Ministers recently published their final statement on local councils. They confirmed which exceptional financial support requests they would accept.
Many councils, including Hampshire, wanted to raise council tax beyond the usual 5% limit. However, only six councils received approval for additional support, and Hampshire was not among them.
In December, Hampshire County Council requested this increase due to a significant budget deficit. They projected a £182 million shortfall for 2025/26, rising to £266 million by 2026/27.
If the government had approved the request, it would have allowed a 15% increase in 2025/26 and another 10% in 2026/27. This would have generated £83.5 million in additional income.
On Monday, the government stated that they evaluate requests for exceptional financial support on a case-by-case basis. They noted that the six councils would struggle to set balanced budgets without help.
Deputy Prime Minister Angela Rayner mentioned that the decisions were not made lightly. She acknowledged the importance of limited tax increases to prevent further financial distress for councils.
She added that they agreed to a few requests but did not approve the full amounts requested. Specific councils received tailored tax referendum principles for the upcoming settlement.
Nick Adams-King, the leader of Hampshire County Council, expressed confusion over the decision. He stated that the government had asked for their support needs, which they calculated as a 15% increase.
He warned that the council’s financial situation is worsening due to rising costs imposed by the government. This decision may lead to further cuts in services.
Adams-King emphasized that reserves can only be used once, comparing it to taking out a mortgage for groceries. He described the situation as intolerable.
Since the request was denied, the council plans to propose a 4.99% tax increase. This would balance the 2025/26 budget through a draw from reserves of £68.2 million.
The council is set to discuss the budget on Tuesday night.