Council faces going bust in two years, report says

A local authority faces effectively going bankrupt in two years without more government support, a council financial forecast has said.

The report to Hampshire County Council's cabinet said it would not be able to deliver a balanced budget in 2026/27 as legally required.

It said it could draw on its reserves next year but would then be left with "very little wriggle room".

Some of the authority's savings proposals, which aimed to generate an extra £84m, have already been criticised by some residents.

Conservative council leader Nick Adams-King told the Local Democracy Reporting Service the report "points to the crisis point potentially coming in two years time".

"The threat to our finances is a stark warning to the government that they must provide Hampshire with the freedoms and flexibilities for which I have been asking since becoming leader in May," he said.

"These would allow us to be more innovative, commercial and reform our services and therefore financial position."

It comes as it was confirmed council tax bills in England are set to rise by up to 5% next April, after the government said it was sticking with the current cap on increases.

Speaking in the Commons on Thursday, communities minister Matthew Pennycook said: "The government certainly recognises the pressures on local authorities and the burdens placed on households as a result of 14 years in which local government was run down.

"We are determined to turn that situation around," he said, pointing to an extra £4bn in new funding for councils in last month's Budget.

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