Hampshire households being slapped with maximum county council tax rise is 'the right thing to do'

At a cabinet meeting on February 18, members were presented with two options to address the authority’s projected deficit for 2026/27.

As previously reported, one proposal would have seen council tax bills rise by almost 15 per cent, which would have required approval from residents via a referendum and a draw from the Budget Bridging Reserve (BBR) of £13.3m.

It would also have left enough funds in the council’s “piggy bank” to balance the 2027/28 budget and avoid the need to issue a Section 114 notice, which indicates that the council’s forecast income is insufficient to meet its forecast spending for the following year.

The second option — and ultimately the preferred one — was a 4.99 per cent increase, the maximum permitted without triggering a local referendum. However, the lower rise carries greater financial risk, as it relies heavily on council reserves.

If approved by full council on February 26, the 4.99 per cent increase will require a £101.9 million drawdown from the BBR to balance the 2026/27 budget.

The option also raises the possibility of the council having to issue a Section 114 notice if it does not receive additional funding from the government.

During the meeting, Cllr Stephen Reid said that while the proposal was the right decision, the council’s position is ultimately dictated by national policy.

Cllr Reid said: “In effect, we are talking about a 4.99 per cent increase in council tax because the government has told us that’s the maximum we can set without a referendum.

“The government now sets the council tax, not us. We are not masters of our own destiny. The government is saying that council tax in Hampshire next year will be 4.99 per cent.

“I think 4.99 per cent is the right thing to do because anything that triggered a referendum would not be successful. So 4.99 it is, and we’ll do our best in the upcoming year to close the gap still further.”

Council leader Cllr Nick Adams-King also supported the 4.99 per cent increase, describing it as the “right thing to do”.

He added: “We are very aware of the cost-of-living pressures that people in Hampshire are under at the moment. In going for that council tax rise, and taking those pressures into account, we absolutely commit to doing everything we can while we are still in these positions.”

Hampshire County Council covers all parts of Hampshire except those in the Portsmouth and Southampton city council areas.

Speaking to the Local Democracy Reporting Service after the meeting, he said he is confident the authority can avoid issuing a Section 114 notice, citing opportunities to make further savings and improve efficiency.

“Small changes come with big numbers. If you make a single change, you can end up with a saving of £10m.”

Cllr Adams-King said the savings would not be on the scale of previous years’ cuts but would instead come through what he described as “bits of transformation”.

These include reshaping directorates, such as removing the Assistant Director for People Services role, generating a saving of £143,000.

He also highlighted closer working with the NHS to use funding more efficiently, particularly around prevention, and to “share the burden of care much better with them”.

A final decision will be made by full council on Thursday, February 26.