Financial crisis deepens at Hampshire County Council

Hampshire County Council has published a report which said the previous budget gap of £132m has actually risen to £175m for the 2025/26 financial year.

The report said that while setting the budget for 2024/25, it was highlighted that £18m of school transport pressure was “absorbed” within the £132m budget gap.

Officers also noted that the economic position for 2023/24 showed a gross overspend across adults’ and children’s services of £38.1m. Therefore, the overall financial position for 2025/26 was reviewed.

(Image: LDR)

The report confirmed the “likely” increase in the financial gap after the review.

In October and November 2023, following a “stage one” consultation process on options for balancing the budget, cabinet and county council approved savings proposals totalling £90.4m, which left a budget shortfall of £41.6m against the £132m forecast budget gap.

However, with the revised budget forecast gap for 2025/26 now in its new position, the shortfall will be around £85m.

Leader of Hampshire County Council, Councillor Nick Adams-King, said the council remains “positive” and “optimistic” that they can find a solution.

He said: “This autumn is a pivotal point for the county council, as like many local authorities nationally, our budgets are under huge strain, now and in the foreseeable future, and now at an increased level that we could not have anticipated.

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“Despite the pressures we face from having less money to do all the things we have done previously my cabinet colleagues and I remain positive for Hampshire and optimistic that we can find a solution to this challenge – by looking at every possible way to help keep balancing the books, as well as continuing to press our case to central government for crucial additional funding and most importantly greater decision-making powers, so Hampshire County Council can continue to serve our residents in a sustainable way.

“Our strong track record also stands us in good stead – with over a decade of experience of innovative practice, operational efficiency, and resource-sharing with other public sector organisations to help make the most of taxpayers’ money.

“We have also carefully managed our financial reserves to act as a crucial buffer against budget shortfalls, albeit those reserves set aside for this purpose are now almost all used up.

“Faced with higher costs, growing demand in key areas like social care, and fewer financial reserves to plug any future budget gaps, we recognise the scale and complexity of the task that lies ahead but we are determined to confront the issue head-on for the benefit of Hampshire’s residents.”

Due to the general election, decisions relating to the savings programme were delayed and will now take place in the following weeks.

Among them were the controversial proposals to cut school crossing patrols across Hampshire and the closing of tips.

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Cllr Adams-King added: “We know that things like the retention of HWRCs (household waste recycling centres) and school crossing patrols, maintenance of vital community transport routes and the continued provision of homelessness grants to the end of their planned contract term are important to both the public and our partners, and we are keen to now also hear the views of select committees on these areas, and on all of the other savings options following their deliberations this month.

“Before making any decisions, my cabinet colleagues and I will carefully consider the officers’ recommendations in the context of the consultation responses, the feedback from the select committees and any deputations made to us.

“In our challenging financial position, I understand why officers are making the recommendations in the reports but I wish to emphasise that the proposals are just recommendations at this stage and that the cabinet are open to considering other options that may evolve through this process and that, should we be minded, we can choose different solutions and timescales at the point of our decision-making in the autumn.”

The leader of the Liberal Democrat opposition at the County Council, Cllr Keith House, said: “Hampshire County Council’s finances have been in freefall for several years but to be told that Hampshire’s budget gap has risen from £132million to £175million in just three months suggests a fundamental change in leadership is needed.

“Local government was badly underfunded by the Conservative Government so the new Government will have to pick up the pieces but in the meantime, under their third leader in three years at Hampshire, councillors have been told to sort out the mess.  The Liberal Democrats will work hard on solutions but real change and real new leadership is needed at the elections next May to take our county forward.”