Tax rise warning

Mori is being commissioned to find out how much people are prepared to pay to make up shortfalls in grants from national government to maintain services. The research will include a community workshop next month and a telephone survey of 1,000 residents in the autumn.

It follows a 15% rise in council tax for half-a-million billpayers this year after the county lost a £21m grant when the Government changed the way it works out how much it gives councils to provide services.

The South lost out in a shift of funds to the North and Midlands and the prospect is for further grant losses for Hampshire in years ahead, bringing the total lost over three years to £48million.

This year, for the first time, the council tax on a standard Band D property broke through the £1,000 mark - a critical psychological barrier.

Most of the council's funding for local services comes from national government. The county says it argued strongly in its "Hands off Hampshire" campaign against the Government's view that taxpayers in the supposedly affluent South could afford to pay more towards the costs of vital services like education, social services and transport.

The council highlighted the impact of higher bills on pensioners and others on fixed incomes who couldn't afford more.

HCC leader, Ken Thornber, said: "We resolved to keep next year's rise as low as possible and this is going to mean hard decisions will have to be made to balance services and council tax levels, while seeking efficiency savings.

"The prospects for next year are bleak, particularly if the Government continues to underfund us on education.

"The Government has recognised that it didn't fully understand the impact of its changes to formula used for funding. We'll be asking residents where they think we should concentrate our spending-would they be happy to pay more if it meant vital services like education, social care and transport could be maintained at current levels or even improve, or which services could be reduced to keep the council tax down?

"Of course, some people will ask why should they pay any more? With our statutory responsibilities, particularly in education and social care, which make up most of our budget, the Government's spending plans-and its power to require that more is given to schools even though they do not fund that increase to schools budgets over schools budgets-give us no choice but to increase the council taxpayers' share of the costs."

Mr Thornber says he has also asked the Prime Minister and Chancellor to "...recognise the problem of the current council taxbands on those with fixed and low incomes, but with no response".

Residents can read more about budget issues in the summer edition of Hampshire Now, the county residents' magazine that is being delivered to 500,000 homes from Monday.