HAMPSHIRE County Council bosses clashed with the Government last night as they warned of a further £30m of Whitehall grant cuts next year.

The Conservative-run authority said that it was rising to “the austerity challenge” as Government funding continued to shrink.

It will make £102.5m of savings in 2015-16, but warned: “The next round of grant reductions is going to be much tougher than before, as savings become harder and harder to find.”

But the analysis was roundly rejected by the Department for Communities and Local Government (DCLG) – which insisted that Hampshire would gain £20m next year.

DCLG claimed that Hampshire would enjoy a 2.4 per cent boost to its overall “spending power” – which bundles together grants, council tax, retained business rates and other payments.

In the House of Commons, Local Government Minister Kris Hopkins said: “Once again, the settlement leaves councils with considerable total spending power.”

Southampton will lose £6.5m of its “spending power” next year – or 3.1 per cent – with other losses in New Forest (3.9 per cent), Fareham (3 per cent), Eastleigh (2.7 per cent) and Gosport (6 per cent).

But – again – the claim about Southampton’s finances is wildly at odds with the city council’s insistence that it must make £30m of savings next year.

Southampton declined to comment yesterday, but has already proposed axing 137 jobs – mainly in adult social care – and hiking council tax by 1.99 per cent to help plug the black hole.

Last night, support for the councils’ claims of pain to come came from the Local Government Association (LGA), which also rejected the DCLG’s position.

The LGA said that the real, average cut to council finances was 8.8 per cent – nearly five times the DCLG’s claim of just 1.8 per cent.

In Hampshire’s case, much of the discrepancy appeared to flow from the Government including £72.8m of Better Care funding in its “spending power” calculation.

The fund transfers cash from the NHS to integrate health and social care services, but the LGA disputes the scale of the transfer – and believes that funding is set to fall.

Other criticisms are that the figures ignore inflation and the rising cost of providing social care to an ageing population.

Cllr Roy Perry, the county council’s leader, said: “We want to take this opportunity to reshape our services to make sure they’re fit for the future and designed around the needs of the people who use them.”

Meanwhile, the Government axed local welfare assistance schemes – a last lifeline for people falling into debt and destitution – forcing Hampshire councils to find £3.2m, if the loans are to survive.