The state of public finances is revealed

Public authorities in Hampshire are in debt to the tune of more than £2.7 billion, a new report has revealed.

The financial position of the county’s councils and the bodies responsible for police and fire services has come under scrutiny.

Research by the TaxPayers’ Alliance said local authority debt across the UK reached £154.6 billion in 2025/26, up £6 billion on the previous year.

The picture across Hampshire varied greatly, with one council having less than £100,000 of debt, while nine had more than £100 million — including two above £600 million.

Portsmouth City Council had the highest overall debt figure in the county at £673.2 million, while Southampton City Council’s stood at just under £406 million.

However Portsmouth City Council said that the bulk of that related to investment which generated funds for the city.

"The council's debt is primarily made up of outstanding loans, the majority of which relates to investment in commercial properties which generate an income, over borrowing costs of £6m each year to support vital Council services.

"Other major borrowing includes for the provision of homes for residents, with borrowing costs met from council rents, and the funding of our successful Dunsbury Business Park and our International Port, which also generate incomes for Council services. In overall terms the value of the Council's Assets exceeds the value of its liabilities (including debt) by £1.9bn."

Meanwhile, Simon Letts, Southampton councillor responsible for finance, also said the authority borrowed prudently to support long‑term investment in the city.

Cllr Letts said: “Current plans include investment in homes to reach the decent homes standard, investment in the waste fleet, and a doubling of investment in our roads network.

“We are also investing in our Outdoor Sports Centre, utilising council resources and government grant funding.”

He said the council had set a self‑imposed limit that annual borrowing costs would not exceed 15 per cent of its net revenue budget.

Eastleigh Borough Council’s figure of £611.3 million equates to £4,277 per resident, the 17th highest rate in the UK.

A council spokesman said borrowing was subject to national and internal safeguards to ensure it remained affordable.

They said there was active treasury management, with a mix of long‑term fixed and short‑term variable borrowing.

Other councils with more than £100 million of debt were Isle of Wight (£171.2 million), Winchester (£159.3 million), Rushmoor (£149 million), Hampshire (£153 million), New Forest (£125.8 million) and East Hampshire (£114.4 million). Havant Borough Council has £10.7million of debt while Gosport has £56.5million.

A county council spokeswoman said its debt needed to be seen against its £3.3 billion budget and £300 million in investments.

She said: “Independent finance experts rate Hampshire as low risk because the interest we pay on our debt only takes up a small part of our annual income.

“We are continuing to keep a tight grip on spending despite costs going up and more people needing vital services, especially for children and vulnerable adults.”

Hampshire and Isle of Wight Fire and Rescue Authority reported debt of £27.4 million, while the Hampshire Police and Crime Commissioner (PCC) and Chief Constable had £19 million.

A fire service spokeswoman said the service needed to fund essential vehicles and buildings without capital grants from government.

This meant most funding had to come from the revenue budget, reserves or borrowing.

A PCC spokeswoman said its outstanding long‑term debt liability related to borrowing made before 2014 to support estate programmes, with adequate reserves for early repayment if market conditions made this appropriate.

A Winchester City Council spokeswoman said its borrowing related to activity in the housing revenue account (HRA) dating back to 2012, when the government replaced the national housing subsidy system with self‑financing of council housing.

She said Winchester paid a one‑off sum to the government to reallocate national debt.

Rental income from council homes is now retained locally to reinvest in the housing stock.

Fareham Borough Council said its debt levels (£53.5 million) needed to be seen in the context of net borrowing, the balance between money borrowed and money invested.

A spokeswoman said net borrowing stood at £31.6million, down 28 per cent on the previous year.

Around 75 per cent of its debt was linked to the change in HRA financing, they added.

Basingstoke and Deane Borough Council had just £95,000 of outstanding borrowing.

John O’Connell, TaxPayers’ Alliance chief executive, said: “The mountain of local authority debt is a ticking time bomb for taxpayers who will ultimately be left holding the bag.

“Decades of speculative investments, reckless borrowing and statutory obligations from Westminster have left councils stuffed to the brim with debt, while basic services like fixing potholes have been neglected.

“Local authorities need to urgently get a grip on their debts before even more end up going completely bust.”