Hampshire County Council’s request to increase council tax by 15 per cent has been rejected by the government.

Ministers have published its final statement for local councils in which they confirmed which exceptional financial support (EFS) requests they were accepting. 

Several councils, including Hampshire, wanted to increase council tax beyond the usual 5 per cent limit. However, the government only approved the support for six local authorities – and Hampshire County Council was not one of them.

In December, Hampshire County Council made the request due to the council’s “impossible” financial position, facing a budget deficit of £182m in 2025/26, rising to £266m by 2026/27.

If the government agreed to the EFS request and allowed a 15 per cent increase in 2025/26 and a further 10 per cent in 2026/27, no draws from balances would have been required over the next two years.

It would have generated £83.5m of additional recurring income in 2025/26 and reduced the recurring budget to £53.6m in 2026/27.

On Monday, the government said that requests for councils requiring EFS were evaluated on a “case-by-case basis”. It added: “All six of the councils have been clear they will not be able to set a balanced budget without government support.”

“The government has not agreed to all requests and has not agreed to any request in its entirety to reduce the impact on taxpayers.

"In the areas where we have made the difficult decision to allow limited council tax rises, we expect that no taxpayer will see their bills reach higher than the average compared to similar authorities. ”

In a statement, Deputy Prime Minister Angela Rayner said that the decisions had not been taken lightly and while recognising the importance of “limited increases in helping to prevent these councils falling further into financial distress”.

She said: “We have agreed to a limited number of requests and, in all cases, have not agreed to the full amount requested. 

For the 2025 to 2026 Settlement, bespoke additional council tax referendum principles will apply for Windsor and Maidenhead Borough Council (+4%), Birmingham City Council (+2.5%), Bradford Council (+5%), Newham Council (+4%), Somerset Council (+2.5%) and Trafford Council (+2.5%).

The leader of the county council, Nick Adams-King, said that he was “mystified” by the decision.

Cllr Adams-King said: “The government had asked us to tell them what support we needed, which we calculated as a 15 per cent council tax increase and now it has said no.”

He said that the council’s financial position “continues to deteriorate” mainly due to the added costs the government “is putting on us."

The county council leader said the decision may mean further cuts to services since they need further savings.

“Reserves can only be spent once, and really, it is like taking out a mortgage to buy the groceries. It cannot last.

“The position we have been put in by the government is intolerable. We face huge cost increases not of our making and it tells us we cannot raise council tax above 4.99 per cent. The situation is a mess.”

Since the request has been rejected, the council will now propose increasing council tax by 4.99 per cent. This would mean that the 2025/26 budget will be balanced through a draw from balances of £68.2m.

The council is due to discuss the budget on Tuesday night (February 4).