Council tax to rise but council says increase is still not enough

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Households in Hampshire will be paying more than £70 a year to the county council from April and the authority’s finances have “never been bleaker”.

Hampshire County Council said the 4.99 per cent rise will earn it an extra £39 million – but it’s still not enough.

The new rates, the maximum allowed without a referendum, will see a band D home pay £1,533.24 from April, a rise of £72.99 per year or roughly £1.40 per week.

It will mean the authority will earn more than £826m from council tax in the next financial year and households will also face increases in the amounts they pay to the police and crime commissioner, fire authority and district councils.

According to the council papers, extra money from the government, business rates and tax base figures mean income for the next financial year is set to be more than expected. That means it will need to use £10.6m less of its Budget Bridging Reserve than it thought, leaving extra funding for future years

Still, a deficit of £74.1m is expected for 2024/25, which will be met from the reserves. By doing so, the county council can deliver a balanced budget for the upcoming year as it is legally required to do.

Despite the extra cash from the government, pressures in school transport, special educational needs and adult social care will mean the county council can’t meet the £132 million gap for 2025/26.

County council leader Councillor Rob Humby said: “At a time when household budgets are also under considerable pressure, the decision to increase our portion of the council tax by 4.99 per cent from April this year has been a very difficult one.

“Even with this increase, it’s not enough to close the significant gap in our budget in 2024/25, which we must fill from our reserves – dedicated funds set aside specifically to address such shortfalls.

“Having this financial ‘safety net’ in the form of our reserves sees us safely through the upcoming financial year, but this money will very soon run out, and without the fundamental national changes we have been calling for to the way local government is funded overall, we must look closely at what the county council can continue to deliver in the years to come.”

Leader of the Liberal Democracts group Councillor Keith House said that the council’s position is bleak and sits “on the edge of steeper financial precipus”.

He also strongly criticised Prime Minister Rishi Sunak and the Conservative MPs of Hampshire, who, in his opinion, “keep voting for poverty in public services” across the county and are the reason for the ‘destruction’ of local government.

Councillor House said: “I would like to thank Rob for outlining again how stark the financial position is. It is bleak, and this has never been bleaker. I don’t think any of us ever expected it to be this bleak.

“The problem is that Rob outlines the problem but not the solution. We know the only solution is to replace the MPs who keep voting for this poverty in public services across our country. Not just the local government but across public services.

“I would like to thank all the staff team who have the otherwise stateless task of being forced to manage the decline of this council, not the roles they expected to get into when they were recruited or starting their careers here, all due to the continued underfunding of local government by Rishi Sunak and his Conservatives MPs.

“The financial disaster is not entirely the current Conservative county council administration’s fault. It could have been a fair bit different if council tax had not been frozen due to the soothsaying words and promises of Eric Pickles (Conservative secretary of state for communities and local government from 2010 to 2015) we could have income nearly £100m higher each year.”

He added: “But now this council sits on the edge of a steeper financial precipus.

“The real responsibility for the decline of county councils and local public services rests squarely with Rishi Sunak and its Conservative MPs from Hampshire and beyond.

“We must lay responsibility for the destruction of the local government where the blame rests, and that is with our Conservative MPs. We know there’s no hope from Sunak’s Conservatives.”

Alongside revenue budget plans that relate to the day-to-day delivery of local services to Hampshire residents, the county council has also approved new capital spending of £880.6 million over the next three years.

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