Hampshire County Council facing almost £250m black hole

The future of Hampshire County Council is under threat after it revealed it will be facing a budget deficit of almost £250m in a few years’ time.

The Conservative-run council is currently plugging an £80m black hole by April 2023, with cuts to budgets across most departments – including the decision to scrap a £175,000 payment to West Berkshire Council which allowed Hampshire residents to use the tip in Newbury.

But by the 2025/26 financial year the county council could have a "staggering" net budget deficit of £237m, raising major concerns about the long-term economic state of the council.

Director of corporate operations, Rob Carr, said: “The picture does look quite bleak.

“Our expectation is that funding will remain flat, but we have significant issues with growth in adult social care costs and inflationary pressures in energy and construction.

“There simply is not enough money coming from the Government to sustain the growth we are experiencing, and we don’t have the firepower to address the funding gap ourselves.”

The £237m figure is an estimate based on current projections – but Mr Carr warned the final total could be even higher.

Councillor Steve Forster, executive member for commercial strategy, estates and property, said: “We need that support from government – but I think what we have is a pragmatic budget to go forward that highlights the areas where we need the most help.”

The council is preparing to increase its share of council tax for the forthcoming year by 2.99 per cent, with one per cent ringfenced for adult social care – the most council tax can be increased this year without needing to put the decision to a public referendum.

Mr Forster added: “We’re still one of the three lowest council tax areas in the country, so that’s also something we need to think about.”

The county council is already making cuts of £80m for April 2023.

Opposing Liberal Democrat leader Keith House said: “Over the past few years we have had increasing difficulties.

“In the long-term, our financial position is not good because the ongoing pressures are always greater than our income.

“For example, the level of extra spending we’ve had to put into social care over the past few years has been phenomenal.

“This isn’t a political point – we all live in the same county, dealing with the same problems. It’s way more than we’ve ever had to face before.”

County council leader Keith Mans added: “There are serious issues with local government finance.

“The Government has to think carefully to ensure our services don’t just get flat funding when demand is going up.

“I agree that there does need to be a reset in local government.”