Managing Hampshire County Council's finances in 2003-4 was again a challenging exercise, says leader, Ken Thornber.

Services, such as care for the elderly and children, continued to face increased demand at a time when government funding left many county councils in the South-East facing a shortfall.

The authority's accounts show an overall underspend of £1.6m-0.15%-as a result of services keeping their books within budget.

"This has enabled an addition to be made to balances which will assist in dealing with uncertainties over government funding and budget pressures in coming years," says Mr Thornber.

"Local government finance remains a bone of contention with some sections of the community whose concerns about increasing council tax remain as vigorous as ever. This I can fully understand, which is why it is vital that the Government funds us adequately," adds the leader.

"It's equally important that the Government uses the latest figures in order to do so. When calculating our grant settlement for 2004-5, it saw fit to use census data on our population numbers from 1991 rather than 2001 and plans to do so again in 2005-6.

"The Government itself estimates that we lose around £7.5m per year because it continues to use out-of-date information when assessing our grant entitlement."

He said he was confident that the county would continue to both balance its books and provide excellent services-"notwithstanding another example of government underfunding."

Residents can see for themselves how the county spent its 2003-4 budget of £1.032bn providing essential services. The statement of accounts is available for inspection until next Tuesday, September 14th, at The Castle, Winchester.

Residents are advised to give advance notice if they wish to look at the accounts so that staff can ensure the material is available on arrival.