There is a fresh warning that Hampshire County Council could be left with “even less money”, with fears funding could go to authorities in the north instead.

Hampshire County Council leader Nick Adams-Kings met with the new Conservative Party leader Kemi Badenoch, alongside other council leaders for the wide-ranging discussion.

In a meeting in London, Cllr Adams-King told the new leader that the council had still not received formal confirmation that the National Insurance employer increase announced in the budget last month would be covered by the Government.

If it is not included, the rise could cost the council an extra £10 million, which it does not have, the county council leader said. The authority has already made cuts due to a £175m budget gap expected by 2025.

The leader also said he was worried the looming local government funding settlement could remove substantial funds from Hampshire and other southern councils for redistribution to “failing Labour” councils in the North and Midlands. He singled out councils such as the bankrupt Birmingham City Council as he said the Labour government wanted this year’s local government funding settlement to be targeted.

Cllr Adams-King insisted to the new leader that Hampshire wanted to see reform of how services are delivered to give the authority “the chance to help itself and use money for priority services rather than spending according to government diktat”.

He said: “I would like to thank Kemi for meeting with us so quickly after becoming a leader to hear about some of the challenges we face. It shows how seriously she is taking the threat to local government from Labour.

“Pressure on our services remains due to increased demand, but we are being hit with big NI and wage costs due to the Budget, alongside the very real fear we will receive less funding so the money can go to the north.

“This cannot be allowed to happen when we are facing a budget deficit in the region of £180 million in a few years’ time.”

He added that the county council was ready to be “innovative” and “entrepreneurial” to help close the deficit, but the Government “had shown no sign it would allow the authority to do so” despite him writing to the Chancellor ahead of the budget.

“I am positive we can turn the situation around, but only if we receive a fair funding deal from the Government that includes us being given the powers to innovate through less central control of funding and reform of how councils operate. So far, we have heard nothing.

“If action is not taken, then Hampshire, alongside many other councils, is heading for a slow-motion car crash in a few years’ time when the money, and any levers we have to avert disaster, run out.”