Hampshire County Council could spend up to £500,000 on a legal challenge against the Government’s plans to reorganise local councils across the region.

A report due to be discussed by the council’s cabinet on June 9 says legal proceedings could be launched if ministers fail to provide a satisfactory explanation for choosing a five-unitary authority model for the area.

However, the council has not yet decided to begin a judicial review.

Instead, councillors are being asked to approve the authority to take legal action if a response from the Secretary of State Steve Reed, expected on June 5, does not adequately answer concerns raised by the authority.

The dispute centres on the government’s decision in March to back “Option 1A”, a proposal that would create five unitary councils across Hampshire and the Solent and would separate communities into bigger councils.

Mr Reed said the model was chosen because it best met the financial sustainability test.

But Hampshire County Council argues the financial evidence behind the decision is “flawed”.

The report says: “The five unitary model did not make a saving, would increase costs by £31m per annum, and was based on a flawed methodology.”

According to the report, the county council’s own analysis found that a five-unitary model would increase costs by around £31.3 million a year.

By contrast, the councils behind Option 1A said their proposal would deliver annual savings of £63.9 million, leaving a difference of £95.2 million between the two assessments.

Council officers say they repeatedly asked the government to explain why it concluded that the five-unitary option was financially sustainable, but have not received a detailed response.

The report states: “The Secretary of State has not adequately explained how or why he took his decision to select Option 1A.”

If the government’s response due on June 5 is considered “unsatisfactory”, and external legal advisers believe there is an arguable case, the council could seek a judicial review of the decision.

If the council decides to proceed, it would first have to apply to the High Court for permission to bring a judicial review.

The court would first decide whether the case can go ahead, usually based on written submissions from both sides. If permission is refused, the council could ask for a hearing.

If permission is granted, the case would move forward and the government would be given the opportunity to submit detailed arguments defending its decision before a full court hearing takes place.

Should the council succeed, it is expected to ask the court to overturn Mr Reed’s decision to back the five-unitary model.

However, that would not automatically result in the council’s preferred four-unitary proposal being adopted.

Instead, the government would likely be required to reconsider the Hampshire and Solent reorganisation plans and make a fresh decision.

The report also notes that even if the council were successful, a court may decide not to overturn the decision if it concludes that any legal errors made no substantial difference to the final outcome.

The report estimates the legal challenge would cost less than £500,000, including any costs the council may have to pay the Government if it loses the case.

The money would come from a contingency fund already set aside in the council’s 2026/27 budget.

Council officers argue the expense is justified given what they describe as the long-term financial risks of implementing a reorganisation model based on incorrect assumptions.