Councils across the Hampshire region are taking contrasting approaches to financial preparedness for the major restructure of local authorities.

Authorities must submit their preferred model for local government reorganisation (LGR).

This comes as part of the Government’s national plan to replace the current mixed two-tier structure with larger unitary authorities delivering all council services.

The final call on the make-up of these new authorities will be made by the Ministry for Housing, Communities and Local Government.

This decision is expected in spring 2026 following a public consultation.

Elections for shadow authorities for the new larger Hampshire councils will be held in 2027 before the new entities go live the following year.

The final submissions from the 15 councils across Hampshire and Isle of Wight, which must be sent by Friday, September 26, are likely to include cost projections for implementing LGR.

Figures published by Hampshire County Council, which is working in partnership with East Hampshire District Council, suggested the cost of creating three mainland authorities and the Isle of Wight remaining a standalone council would be in the region of £80 million, while a four mainland authority modelwould cost around £132 million.

The interim submission in March, which was co-signed by all of the region’s councils, said “preliminary benchmarking” showed it could be the most expensive reorganisation delivered to date.

In advance of final proposals going into government, some authorities have set aside money in earmarked reserves, while others have decided against taking such measures.

The Local Democracy Reporting Service approached all 15 councils asking if they had set aside money for LGR and if they planned to increase this amount. The summary of their responses can be found below.

Basingstoke and Deane: No earmarked reserve for LGR but council has “healthy reserves” that can be drawn on if and when required.

East Hampshire: Does not currently have a value earmarked for LGR, but it will be reviewed at each stage of the process.

Eastleigh: A £1 million budget for LGR is in the medium-term financial plan held in a dedicated earmarked reserve. No plans to increase this amount currently, but the council is keeping it under review.

Fareham: No specific sum of money earmarked for LGR at present.

Gosport: No money earmarked to cover LGR costs and no dedicated reserve.

Hampshire: No specific sum currently earmarked to cover the costs of LGR with no earmarked reserve, but this will be reviewed at each stage of the process. Cost implications will be clearer once government has made its decision on the future shape of local government in the region. The county council’s preferred option would cost in the region of £80million.

Hart: Initial £50,000 budget with a further £150,000 added in July, but not in a dedicated earmarked reserve.

Havant: Set aside £50,000 in this year’s budget for LGR but most of the work is currently being managed within existing resources.

Isle of Wight: No specific budget or reserve for LGR.

New Forest: Set up a LGR revenue budget of £150,000 per year as of 2025/26, with £500,000 set aside to cover costs associated with LGR in a dedicated earmarked reserve. No plans to increase this amount although this will be kept under review.

Portsmouth: No specific budget or reserve assigned to LGR.

Rushmoor: Earmarked £100,000 towards costs associated with LGR in an earmarked reserve with no plans currently to increase this amount, but it will be kept under review.

Southampton: The estimated financial requirements for future years are £2.1 million in 2027/28, £1.7 million in 2028/29 and £1.5 million for 2029/30, but the reserve is not currently included in the approved medium-term financial strategy. The amounts will be kept under review after decision was made to create a reserve to fund the implementation costs in advance of the creation of the new authority.

Test Valley: Across 2025/26 to 2027/28, the borough council has currently committed up to £471,000 for costs associated with LGR in its budget but it is not in an earmarked reserve. It will be kept under review, but there are no current plans to increase this amount.

Winchester: No earmarked reserves for LGR. The city council will set a budget for reorganising its authority when government decides on the final configuration and it is known that it will definitely proceed.

Reporting by Noni Needs, Natalia Forero, Rufus Pickles and Jason Lewis