Cash-strapped Hampshire County Council remains in an “unambiguous financial crisis”, a senior opposition councillor has warned.

Liberal Democrat Cllr Martin Tod hit out at the Conservative administration’s approach to the authority’s current situation and called for a “survival plan”.

He suggested emergency measures such as large council tax rises or permission to borrow money to balance the books could be needed.

Conservative council leader Cllr Nick Adams-King disputed this view, stating there was a clear focus to address the challenges the local authority faced.

A report on the council’s finances showed £22.7 million of reserves were used to close the funding gap last year.

This was £44.2 million less than originally earmarked when the budget was set in February 2025.

However, the council has budgeted to draw down a further £101.9 million from reserves in the current financial year, leaving £53.7 million in its budget bridging reserve against a projected funding gap of £179.7million in 2027/28.

Chief financial officer Andy Lowe said that even if other reserves were repurposed, there would still be a projected shortfall of £44.8 million next year.

Cllr Tod said the report presented to cabinet on Tuesday, July 7, did not represent a genuine recovery.

He said: “Although this report shows a smaller deficit, this isn’t financial recovery.

“It’s a smaller than expected raid on reserves and it shows a council that is in unambiguous financial crisis.

“It is important to note it is not just external pressures.”

Cllr Tod criticised what he described as a “muted” response from the Conservative administration, arguing the council needed to be more candid about the scale of the challenge.

He said: “We need a survival plan. We owe it to the successor authorities that will be inheriting the deficits that the county has, but we also owe it to ourselves.

“We should always look at decision-making through the lens of what would happen if local government reorganisation did not go ahead.”

He added the council may need to consider emergency financial support from the government, council tax rises, capitalisation, and further spending cuts.

Cllr Adams-King rejected the criticism, insisting the authority had a clear plan in place.

He said it was “entirely wrong” to suggest there was a lack of urgency or strategy.

Cllr Adams-King said: “Martin is doing exactly as he should as an opposition spokesman, but to suggest that we need some kind of emergency situation and start calling people in desperately to help us is entirely wrong.

“We have been working on a very clear strategy and plan, the evidence of which is in front of us now.

“We’ve made savings of over £90 million across the year as planned, alongside additional efficiencies of more than £40 million.”

He added he was confident the council could continue without the need for emergency measures until new unitary authorities are scheduled to take over services in 2028.