The Government has denied Hampshire County Council’s request for a 15% tax hike, impacting their budget plans for the coming years.
Winchester: Hampshire County Council wanted to raise council tax by 15%. But the government said no. This decision affects their budget plans.
The government recently shared its final statement on local councils. They approved financial support for only six councils, and Hampshire wasn’t one of them.
Hampshire County Council faces a big budget deficit. They estimated a £182 million shortfall for 2025/26, growing to £266 million by 2026/27.
If the government had approved the tax increase, it would have helped balance their budget. The council hoped to generate £83.5 million in extra income.
On Monday, the government explained their decision. They evaluate each council’s request individually and aim to protect taxpayers.
Deputy Prime Minister Angela Rayner stated that they considered the needs of councils. However, they also had to think about taxpayers’ interests.
She mentioned that only councils with the lowest tax levels received some support. Even with these increases, overall tax won’t exceed last year’s levels.
Hampshire has the second-lowest council tax in the country. They had frozen it for five years before this request.
Nick Adams-King, the council leader, expressed confusion over the government’s decision. He felt it didn’t make sense, especially after they asked for support.
He warned that the council’s financial situation is worsening. Rising costs and lack of funding are major issues for them.
Adams-King said the decision might lead to cuts in services. They will continue using reserves, but that’s not a long-term solution.
He compared it to taking out a mortgage for groceries. It’s not sustainable, and the government’s stance is frustrating.
Now, the council plans to propose a 4.99% tax increase instead. This will help balance their budget but still requires drawing from reserves.
The cabinet will discuss this situation today.
