Hampshire County Council’s 15% council tax rise rejected by government

CASH-strapped Hampshire County Council’s plan to slap its residents with a huge 15% council tax increase has been rejected by the government.

As reported in the A&T, the authority said it has been “left with no option” but to submit a request for exceptional financial support (EFS) to the government for 2025/26 due to a £182million deficit, cuts in all service areas, and the use of reserves to fill gaps.

The EFS request to government, rejected on Monday, would have allowed a 15% increase in 2025/26 and a further 10% in 2026/27, meaning the council would not have to draw on its reserves. Only six applications from local authorities were approved.

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.

If approved, the hike would have generated £83.5m of additional recurring income in 2025/26 and reduced the recurring budget to £53.6m in 2026/27.

Leader of the council, Cllr Nick Adams-King, has now proposed a 4.99% increase, which will be decided at a meeting of the full council next Thursday (13th February).

Deputy chief executive Rob Carr had earlier recommended that if the EFS request was not approved, the council should trigger a referendum. This was due to the “likelihood” that the council would issue a Section 114 notice – effectively declaring bankruptcy – in advance of the 2026/27 financial year, since there would not be enough reserves to bridge the gap.

Speaking at a meeting of the cabinet on Wednesday, Cllr Adams-King said residents had been asked about what a “reasonable” amount of council tax would be during a recent public consultation.

“It’s fair to say that anything above the referendum limit was quite clearly rejected”, he said, adding: “Clearly, none of us want to ask people to pay more council tax”.

He explained triggering a referendum would create additional costs to the council of over £2m, and if unsuccessful, it would give rise to potential re-billing costs of £400,000.

He added: “Regardless of whether we would or would not be holding elections due to the devolution programme in May, holding a referendum will cost us additional money.

“We know that people would not be supportive of a council tax increase. Indeed, we’re not supportive of a council tax increase unless we were absolutely forced to do so, which is where we are.

“So our recommendation that we’ll be passing on to the council is that we increase our council tax by the referendum limit, which is 4.99%.”

If approved, the precept will generate £876m for the council in 2025/26.