How Medway’s £8m budget gap became £66m in four months
Plus new council homes, facial recognition, the end of KentLive, and a particularly well-served house in Upnor
In May, Medway Council was £8.4m away from balancing next year’s budget and potentially escaping its reliance on emergency government support. Four months later, that gap has grown to £65.9m. We look at how adult social care, rising demand and the cost of previous borrowing turned a difficult financial position into a considerably worse one. Elsewhere, 81 new council homes open, KentLive prepares to close, the Dynamos begin their season, and we find a £270,000 house on Upnor High Street.
How Medway’s £8m budget gap became £66m in four months
Four months ago, Medway Council’s financial problems were beginning to look almost manageable.
An independent review by public finance experts CIPFA put the gap in next year’s budget at £8.4m and said the council’s long-held ambition of finally ending its reliance on emergency government support was within touching distance.
That moment did not last. The council’s new Medium Term Financial Outlook, going before Cabinet on Tuesday, now puts the gap for 2027/28 at £65.9m. That is quite a change in the space of one summer.
The biggest reason is adult social care, where the council is effectively trying to catch its budget up with reality.
Over the last financial year, the service’s position worsened steadily. By the third monitoring round, adult social care was forecasting an overspend of around £12m. By the time the final accounts were put together, the overspend had grown to £14.7m.
The calendar plays an awkward role in this. Medway had to agree this year’s budget in February, while last year’s adult social care bill was still getting worse underneath it. By the time the final numbers arrived, the new budget was already live. As a result, the council began 2026/27 trying to spend £114.5m on a service that had just cost £128.2m.
This is one of the stranger features of local government finance. Everyone must agree a balanced budget before they fully know how unbalanced the previous one turned out to be.
CIPFA called it “entirely unrealistic” to expect the service to spend £13.8m less than it had the year before and still stay within budget.
The council is now trying to stop playing quite such an expensive game of catch-up.
Its forecast for next year increases the adult social care budget by £38.6m, taking it from £114.5m to £153.1m. In council finance language, this is “rebasing.” In more normal language, it means starting with a number closer to what the service actually appears to cost.
Even that does not make the problem disappear.
Medway is not simply spending wildly more on adult social care than comparable councils. CIPFA found its unit costs were broadly in line with similar authorities, despite the repeated overspends. Demand has increased, provider prices have risen, and more complex care packages cost more.
The council is continuing to push the government on the issue, while also looking for more savings and ways to generate income.
But £38.6m still leaves more than £27m of the budget gap to explain.
Children’s services are expected to require another £9.2m next year, SEND transport another £1.2m and temporary accommodation another £3.8m as demand and the price of nightly accommodation continue to rise.
Then there is the increasingly awkward cost of paying for previous financial problems.
Medway has relied on Exceptional Financial Support for the past three years, effectively government permission to borrow money to balance day-to-day budgets. CIPFA calculated that the council expected to use £58.1m of that support between 2024/25 and 2026/27.
Because Medway has funded it all through borrowing, those decisions now come with their own bill. CIPFA estimated the associated interest and repayment costs would reach £3.8m this year, and warned the burden would become less sustainable if emergency support continued beyond next year.
All of this would be easier if the council could reliably see the trouble coming.
CIPFA judged Medway’s overall financial management to be good, but said the quality of forecasting remained a concern, particularly in adult social care. It also highlighted the loss of two senior finance staff and a shortage of strategic finance capacity.
A new Chief Finance Officer has since been appointed, while the council says it is continuing to strengthen the finance operation rather than simply reducing its size.
CIPFA also found Medway had generally done well at finding savings. Of a £28.8m savings and income target last year, £26.1m was achieved. Adult social care was the awkward exception, delivering just 53.6% of its own target.
Now everyone gets to do it all again.
Council departments will spend the autumn hunting for savings and additional income, while Medway waits to find out how much money government will actually give it. The £65.9m gap will move before councillors set the budget in February. It would be remarkable if it did not.
But the direction of travel is harder to shrug off.
In May, £8.4m stood between Medway and its ambition of finally escaping emergency financial support. Four months later, the starting gap is nearly eight times larger. The council may eventually close it, but things suddenly look a very long way away.
Catch Up
This week brought three different arguments about change: who gets to challenge how an industry works, what Medway should actually be doing about climate change, and whether the council is going anywhere after all.
In our latest interview, Steven spoke to actor, producer and Evulve Productions founder Esme Michaela about trying to make film and theatre more accessible. That takes in 14-hour days, chronic illness, feminist filmmaking, county lines, training in New York and why doing something differently simply because the norm does not work for everyone should not be especially radical.
Steven Keevil
That question of what should change carried neatly into our latest Voice of the Leaders, where we asked Medway’s political group leaders what the council can and should actually do about climate change and net zero. The answers range from continued council action and community energy projects to warnings about costs, development on the Hoo Peninsula and whether some environmental policies risk becoming expensive gestures rather than useful ones.
Local Authority
And then there is Medway Council itself, which last week was preparing to disappear in 2028 and now has no idea when, or even if, that will happen. We looked at what the government’s sudden pause on local government reorganisation actually means, with normal elections next May, millions of pounds of preparation left in limbo, and an authority that now has to plan for a future in which it both survives and eventually abolishes itself.
Ed Jennings
In brief
🏘️ Medway Council has opened 81 new council homes in Gillingham and Twydall.
🚓 Kent Police made 18 arrests during two days of using facial recognition technology in Chatham.
🏒 The Invicta Dynamos ice hockey team begin their competitive season this weekend.
📰 KentLive is set to close, leaving a further hole in Kent's local news scene.
Council matters
Meetings next week:
- Tuesday: Cabinet will discuss finances, nuisance vehicles, private sector licensing, and more.
- Wednesday: Planning Committee will decide on two HMOs and converting the former St John Fisher school building into 11 flats.
New planning applications:
- Extension of skatepark at Cozenton Park.
Property of the week
Upnor High Street is one of those places where almost any house is going to have an unfair advantage, given that it starts with cobbles and ends at a castle. This two-bedroom terrace is on the market for £270,000 and does a reasonable job of living up to its surroundings, with exposed floorboards, fireplaces, a log burner and a cellar squeezed into its 600-ish square feet. There is a small courtyard garden out back and, rather less picturesquely but more usefully, solar panels on the roof. It is not enormous, and an EPC rating of E suggests the log burner may occasionally have responsibilities beyond ambience, but £270,000 gets you an actual house on one of Medway’s most distinctive streets, with four pubs within wandering distance.
Events this week
🐺 Sat 19 Sep - Stewart Lee vs The Man-Wulf // Comedian returns to Chatham and tries to unleash his new edgy alter-ego. Central Theatre, Chatham. Tickets £31.
🎨 19 Sep - 15 Nov - In Turner’s Wake // Largest display of original JMW Turner works yet staged at the Dockyard, shown alongside contemporary paintings by Jake Wood-Evans. Historic Dockyard, Chatham. Tickets £29, including Dockyard entry.
🛍️ Sun 20 Sep - Rochester Farmers' Market // Stalls selling fresh produce, street food, gifts, and more. Blue Boar Lane car park, Rochester. Free.
💬 Tue 22 Sep - The Psychology of Fetish & Kink // Talk exploring factors that drive fetish and kink behaviours. Glassbox Theatre, Gillingham. Tickets from £13.50.
🎭 24 Sep - 3 Oct - Emma // Amateur production of Jane Austen's classic novel. Medway Little Theatre, Rochester. Tickets £12.
Footnotes
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