GOVERNMENT plans which could result in a council tax hike of around 25 per cent have been met with amazement as local councillors ask the government: ÔYou canÕt be serious?Õ

Hampshire County Council is now seeking an early meeting with MPs in a fierce challenge over the governmentÕs overhaul of funding for local councils.

Faced with the worst case of a loss of £80million from its budget over the coming years and 23 per cent council tax rises, Hampshire County Council will also join forces with leaders of county councils across the South-East to argue the devastating impact on services that the governmentÕs new funding formula could have.

As reported previously in The Herald, new proposals have been put forward which will change the way in which the government calculates how much money it will give to local authorities and police forces.

The proposed change is so that the Midlands and the north of the country, which has higher levels of deprivation, are given extra money to combat problems.

If the plans come into effect, Hampshire County Council would be forced into tough decisions to strike a balance between service needs and council tax rises.

ItÕs estimated that the plans could force it to raise council tax by the equivalent of 23 per cent over the next few years - with a possible impact of at least 15 per cent next year, and high rises for subsequent years.

The proposals have brought out grave concerns that Hampshire residents will be left to foot the bill to make up for the reduction in the government grant.

Hampshire County Council leader Ken Thornber said: ÒThe government cannot be serious. If it wants to support deprived areas in the north, it should not being doing so at the expense of council services in Hampshire and burdening our tax payers still further.

ÒIn 25 years of service I cannot remember more grim news.

ÒEach year, we have been forced to increase the council tax by more than two to three times the level of inflation to fulfil the governmentÕs plans and our needs.

ÒAt stake is a big reduction in the money given to local authorities by central government, which will then be redistributed to urban areas in the north to the detriment of those in the south.

ÒThe changes fail to recognise the higher cost of living and therefore providing services in the South East, and places a greater tax burden on so called more prosperous areas. We too have areas of both rural and urban deprivation and families on fixed incomes and we need adequate money to fund services properly.

ÒThe governmentÕs preoccupation with redistributing council monies to the north flies in the face of the higher cost of living in Hampshire or the needs of our community.

ÒA council tax rise of between 20-30 per cent over the next few years would mean the government leaving the people of Hampshire well and truly stuffed.Ó

Hampshire County Council which takes the largest chunk of money from a council tax bill has said that, should the plans be approved, it believed that its precept will have to be raised by almost a quarter over the next few years.

Last yearÕs average precept in East Hampshire stood at £957.78 with the county council taking £734.67, EHDC getting £114.32, the police receiving £75.15 and town and parish councils - which are unaffected by the proposals - taking an average of £33.64.

If the councilsÕ worst fears are confirmed then in the next few years this could rise to more than £1,100 for a band D property.

ÒIf the worst case were to be introduced, the projected loss of £80 million of our budget over coming years would be disastrous,Ó Mr Thornber said.

ÒAt a time when the maintenance and improvement of public services are a priority, significant savings would decimate services and would be impossible to recoup in the time. Savings would have to include education and social services which have always been the publicÕs, county councilÕs and governmentÕs priorities.

ÒThe timing of the review is extremely tight with the government apparently determined to see a new formula implemented for 2003/04.

ÒHampshire County Council has made repeated representations to government about the unsustainable high-level of council tax that government policy has forced upon us in the past and it now seems determined to continue at an even higher level.

ÒWe have already got a very complex formula which determines government funding of the county council and we were promised a simpler more transparent system to replace it.

ÒIn fact, what we are being offered is an equally complicated system that isnÕt understandable, transparent, or fair and leaves us millions of pounds out of pocket.Ó

His words echo those of the Hampshire Police Authority which too said that it would be forced to raise its share of the precept if the plans are approved.

It stands to loose up to £10.4 million for Hampshire and the Isle of Wight which could mean that it would have to raise its precept by at least 22 per cent above inflation to maintain the level of policing currently provided.

There would be little or no chance of any increase in provision of policing across the two counties, it warns.

Chairman of the authorityÕs financial affairs panel, Mike Attenborough-Cox, said: ÒAlthough the police authority does not dispute the need to tackle street crime and deprivation, it does not want funding to decrease to the detriment of the communities of Hampshire and the Isle of Wight.Ó

But East Hampshire District Council is being more cautious and believes that the proposed new funding formula may not be as disastrous for the county as it first appears.

Council spokesman Steve Bradley said: ÒWe are examining this and there are a lot of cost adjustments which will probably mean that we will not get as much as others in some areas.

ÒBut there are other areas that we may get some money from so it is too early for us to say how this will effect us.Ó