Funding boost not enough to stabilise Medway finances

Welcome to your first Local Authority news briefing of the year. We're easing in gently by... checks notes... wading through reams of Medway Council Cabinet papers, after the first agenda of the year was stacked with interesting developments for our towns. We've got news on how Medway still can't balance the books even with additional government funding, the establishment of a new nature reserve, £1.5m to improve Medway's shopfronts, news in brief, and lots more.

Funding boost not enough to stabilise Medway finances

Medway Council is likely to seek a third year of exceptional financial support from central government despite receiving an above-average increase in funding under the government’s new local government finance settlement, according to a Cabinet report due to be discussed next week.

The report sets out the implications of the provisional settlement for the council’s 2026–27 budget. While it confirms a significant uplift in headline funding for Medway, officers warn that the changes will not be sufficient to close the authority’s underlying budget gap.

Under the new 'fair funding' framework, Medway’s Core Spending Power, the government’s measure of councils’ funding capacity, is forecast to rise by 16.2% between 2024–25 and 2026–27, compared with a national average increase of around 13.5%. Over the full three-year settlement period, funding is projected to rise by almost 32%.

However, the Cabinet report makes clear that Core Spending Power is not a direct measure of cash available to spend, and that the provisional settlement leaves Medway around £7.9m worse off than assumed in the draft budget presented in November. This is largely due to changes in how grants are consolidated, phased in and rolled into core funding under the new system.

As a result, officers conclude that the settlement “alone will not be sufficient to meet the pressures on statutory services” or enable the council to set a balanced budget for the coming year without further government support.

Council leader Vince Maple said the authority had hoped to avoid needing Exceptional Financial Support for a third year, but that this now looked unlikely.

“When we first spoke about Exceptional Financial Support, when we wrote to government originally, that was on a three-year basis,” he told Local Authority. "It was my ambition, in a good set of circumstances, not to have to access it for this third year. We are not likely to be in that position now. We think we will have to.”

Maple said the most significant pressure remained adult social care, although he stressed that Medway faces a broader range of challenges than many other councils.

“Adult social care is the biggest financial challenge, but it’s not alone,” he said. “As a unitary authority, we have all four of the major pressures facing local government. Temporary accommodation and housing pressures sit with districts and boroughs, while special educational needs and disabilities, children’s social care and adult social care sit with upper-tier authorities. We have responsibility for all four.”

Around 6,000 people in Medway currently receive adult social care support, and the cost of providing care continues to rise as needs become more complex. Officers warn that even modest increases in demand or unit costs can significantly impact the council’s finances.

The settlement does provide greater certainty than the one-year deals that have characterised local government funding in recent years. Funding levels for the second and third years are guaranteed as a minimum, with any subsequent changes expected to be upward. However, the report also highlights ongoing uncertainty around the reset of the business rates system and the gradual withdrawal of legacy grants.

Ministers have confirmed that Exceptional Financial Support will remain available for councils in the most difficult financial positions, alongside the option of bespoke council tax flexibility in exceptional circumstances. Medway’s draft budget already assumes a council tax increase of 5%, in line with government expectations for authorities with social care responsibilities.

Maple said a council tax rise was unavoidable, alongside continued efforts to raise income and control costs.

“We’ll see a council tax increase. I’m on the record elsewhere saying that,” he said. “That’s the working assumption by central government. As always, we’ll be reviewing our fees and charges as well, and we’re also looking at areas where increased usage is bringing in more income, such as our sports centres.”

He pointed to progress made through the council’s Financial Improvement and Transformation plan, which has delivered savings in recent years, but said this had not been enough to offset demand-led pressures.

“We’ve made good progress, and that’s been reported publicly,” he said. “Those savings are there, but the pressures remain.”

Maple said he was hopeful that 2026–27 would be the final year Medway needs exceptional financial support, although he stopped short of making a firm commitment.

“I’m hoping so. I’m planning for that to be the case. I am confident that if we do have to seek Exceptional Financial Support, it will be at a lower level than we’ve seen for the previous two years.”

Final budget proposals will be brought to Cabinet in February, before being debated and approved by full council later in the month.

Horsted Valley on course to become Local Nature Reserve

Medway Council is moving to formally designate the Horsted Valley as a Local Nature Reserve, a decision that would give statutory protection to one of Chatham’s largest areas of connected green space.

The proposed designation would bring together a series of existing sites, including Luton Millennium Green, Daisy Banks, Coney Banks, Barnfield, Bishop’s Hoath Woodland, Snodhurst Bottom, Ridgeway Bank and Horsted Farm, and treat them as a single Local Nature Reserve. Each area already has its own character and use, ranging from sports pitches and play areas to chalk grassland and ancient woodland, but the report proposes managing them collectively as a continuous green corridor through the Upper Horsted Valley.

Taken together, the sites form a continuous green corridor running through Chatham, stretching from the housing developments of Walderslade and Chatham towards Luton, and southwards to the open land around the Davis Estate. Despite its scale and location, the area has not previously been formally designated or managed as a single site.

The report describes Horsted Valley as a dry chalk dip slope valley around two miles long, characteristic of the North Downs and similar in form to Capstone and Darland. Surrounded on almost all sides by housing, it contains a mosaic of habitats, including rare chalk grassland and semi-natural ancient woodland, alongside formal facilities such as football pitches, play areas and walking routes with interpretation panels.

Historically, much of the valley was grassland, woodland and arable farmland, with large areas remaining undeveloped until the 1960s. Remnants of these habitats remain and support ecologically important species. Officers identify Daisy Banks and Coney Banks as chalk grassland sites that have become increasingly overgrown with scrub, reducing biodiversity value, while other parts of the valley balance wildlife interest with heavy recreational use.

Work has already been carried out across the valley in recent years, including improvements to play areas, new footpaths, signage and interpretation boards, motorbike restrictions, and the creation of a pocket park at Luton Millennium Green funded through successful external bids. Parts of the valley have also been granted Village Green status, and a local Friends group has been formed to support heritage and interpretation projects.

The practical effect of Local Nature Reserve status would be to fix the valley’s role as protected green space, making future development more constrained and giving the council a clearer legal basis to prioritise conservation alongside public access. Unlike Capstone Valley, which has not been formally designated, Local Nature Reserve status would place Horsted Valley on a more secure footing in planning and land management terms.

A ten-year management plan is being developed to support the designation. This includes proposals for scrub clearance, potential cattle grazing to manage grasslands, and further changes to access, interpretation and facilities. Discussions have taken place with Kent Wildlife Trust about grazing arrangements, similar to those in place at Darland Banks.

The report states that there are no direct financial implications from seeking designation. Any future costs associated with managing the reserve would be covered through existing services and the council’s budget-setting process.

Subject to Cabinet approval, officers expect the necessary documentation to be completed by the end of April 2026, ahead of formal consultation with Natural England and local residents, with the expectation that the process could be completed this year.

Other Cabinet news

In an unusually interesting agenda, several other items on the Cabinet agenda for next week signal significant shifts in our towns:

• A £1.5m injection of government funding is about to be channelled into shopfronts, streets and public spaces across Medway, with a strong emphasis on quick, visible improvements. Much of the money will be distributed through small, time-limited grants that individual premises can apply for to improve frontages, particularly in smaller parades of businesses rather than flagship high streets. Larger, more coordinated public-realm schemes are planned in Gillingham, but all funding must be committed by March 2027 or be handed back.
• Two of Medway’s long-standing Air Quality Management Areas are set to be scrapped, after monitoring has shown pollution levels have remained within legal limits for at least five years. The designations at Pier Road in Gillingham and Rainham High Street were originally introduced because of high nitrogen dioxide levels, but officers say cleaner vehicle fleets and broader changes in traffic behaviour have driven a sustained improvement. Monitoring will continue, but the council does not expect new air quality hotspots to emerge elsewhere in the area in the near future.
• Sleep is being elevated as a serious public health issue in Medway, as this year’s Annual Public Health Report argues that poor sleep is quietly undermining health, wellbeing and productivity across the authority. The report highlights links between sleep deprivation and inequality, particularly for shift workers, young people and those living in insecure or overcrowded housing, while stopping short of proposing new council-funded programmes. Instead, it is designed to prompt action by partners, employers and community groups, reframing sleep as something on a par with diet, exercise and mental health.

In brief

🚓 Three men have been arrested after a man in his 80s was killed after being struck by a car on the A289 before being carried more than a mile on its roof.

🚌 Arriva bus fares in Medway are increasing from 18 January. While most single journeys remain capped at £3, multi-journey tickets will see increases.

🚏 Meanwhile, Medway Council has been allocated £15.4m by the government to improve bus services and network infrastructure.

🚧 Works to fix a burst water main on Maidstone Road in Chatham could take days to complete.

🏗️ Rochester and Strood MP Lauren Edwards has called for stronger enforcement action against an illegal scrapyard operating south of Borstal.

🏘️ Medway Council officers are recommending that a 75 home development on the east side of Hoo be approved.

🗄️ Plans have been submitted for a 350 home development to the south of Allhallows. The proposals also include a burial ground, nursery, mobility hub, play areas, and allotments.

Footnotes

Follow us on social media! We’re on Facebook, Instagram, BlueSky, and Threads, but not that other one.