'Tipping point': Major Tory council kick-starts savings exercise to avoid bankrupty

Hampshire County Council Credit: PA

A major Conservative council is kick-starting a massive savings exercise to close a £132m blackhole in a bid to prevent it heading towards bankruptcy in the future. 

The leader of Hampshire County Council called on central government to either fundamentally change the way council services are funded or reduce what they are legally required to deliver. 

Councillor Rob Humby argued that Hampshire has been well run, and maintained strong public finances, but despite reducing it's budget by £0.6bn through austerity, it still has this shortfall by 2025/26.

"We have now reached the tipping point, with no further financial safety net to fall back on," he said. 

"We do need central Government to fundamentally change the way that local government services are funded, or reduce what councils are legally required to deliver. In the meantime though, we can’t just sit and wait for that to happen."

Cllr Rob Humby Credit: ITV News Meridian

The comments come after Birmingham city council effectively filed for bankruptcy by issuing a section 114 notice. 

Mr Humby has suggested his council is not at that point - but said that without this tough process of cut- backs it could be in the future. 

Rishi Sunak has attacked Birmingham city council and, in particular, it's Labour leadership for financial mismanagement - seeking to turn it's woes into a political issue.

But the situation in Hampshire- and many other Tory councils, highlights how the crisis in local government spans all political colours.

Mr Humby says the work in Hampshire will be guided by a public consultation that closed this summer receiving nearly 3,000 responses.

Rishi Sunak has attacked Birmingham city council and, in particular, it's Labour leadership for financial mismanagement. Credit: PA

It showed that a majority of respondents agreed that there should be changes to council services and structures to help balance the budget. 

However, people are much more supportive of the idea of lobbying central government for legislative change, and generating additional income, than reducing services.

The document suggests there was a fair amount of support for introducing and increasing charges for some services and some support for generating extra income through raising council tax (though most still want minimal increases).

In reality similar exercises are happening all over the country, as councils struggle to make ends meet. 

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