A proposed budget for 2025/26 that protects the quality services the people of Medway value and need will be considered by the Cabinet next week, ahead of Full Council later this month.
The financial plans published today (Friday, 7 February) reflect the final Government settlement for the year (confirmed earlier this week), and show that the level of support required through the Exceptional Financial Support scheme has reduced from more than £26million in the draft budget published last November, to £18.484million.
Medway is far from alone in forecasting a significant budget gap, with many local authorities nationally continuing to make difficult decisions to meet the growing cost of providing essential services, including protecting vulnerable children and adults through social care, supporting those who are at risk of homelessness and supporting children and young people with special educational needs and disabilities (SEND).
Nearly three quarters of Medway’s budget is used to meet the growing cost of providing support for Medway’s vulnerable children and adults. This cost continues to increase, with Medway forecasting it needs to invest a further £39.220million in its children and adult social care and education services to ensure it can meet the growing demand for help and can provide specialist advice to meet the increasingly complex support required. This also includes £17.5million extra funding for Medway schools and the impact of increased staffing costs on the council, including the increase in Employers’ National Insurance on the cost of providing social care.
The budget proposes to invest almost £6.8million more directly into adult social care, another £4.6million into children’s social care, £2million more on SEND and a further £1.7million to provide temporary accommodation for those at risk of homelessness in the next financial year (2025-26).
The Government’s final settlement in February 2025 provided Medway with more than £11million extra, proving its trust in the authority’s reliability to prudently use its allocated funding. Although the additional funding has helped to close the budget gap considerably, it has been more than absorbed by the mounting financial pressures on the services we are required to provide statutorily by Government.
In 2023, Medway Council commissioned the Chartered Institute of Public Finance and Accountancy (CIPFA) to carry out a resilience review of its financial situation. The report recognised that Medway’s overspend was unavoidable and primarily driven by rising costs and demand for Children and Adult Services, and suggested intervention from Government.
Medway Council was granted Exceptional Financial Support through a Capitalisation Directive (ability to increase borrowing) worth up to £14.742million for 2024/25.
Protecting essential services
Medway Council Leader, Cllr Vince Maple, said: “We have very little room to manoeuvre. Despite a more generous settlement from the Government for the coming year, we remain among the lowest funded authorities in the country. Medway’s proposed budget papers show just how stretched we are, and that’s including the figure we’ve requested to borrow through Exceptional Financial Support. I want to be honest and open with the people of Medway – as recommended by sector experts CIPFA we did seek permission from Government for flexibility to increase our council tax to bring us closer to the levels of our neighbouring authorities. This was not a request we took lightly, but the stark reality is that our income no longer covers the cost of providing all the critical services our residents rely on. This would have moved us closer to being financially sustainable in the medium term. However, our request not agreed by Government.
“This budget therefore focuses on protecting the essential services which care for and support our residents as well as best meet their needs. Apart from a proposal to co-develop a new care home in Medway to address the demand for placements, there are currently no plans for other significant new projects. We simply do not have the budget and as CIPFA recognised in their report our administration inherited finances in a “grave situation”.”
In November 2024, Medway’s Cabinet instructed officers to liaise with the Ministry of Housing, Communities and Local Government to secure support through the Exceptional Financial Support scheme to help balance the council’s budget for both this year and next year. Cllr Maple added: “We have every confidence that having supported us in 2024/25, the Government will continue to provide EFS to enable us to balance our budgets and protect our vital community services.”
If approved by Cabinet, the proposed budget will be taken to Full Council on 27 February.