Medway Council is on the edge of bankruptcy
But at least there's money for Splashes
Medway Council is on the edge of bankruptcy
It’s no secret that councils across the country are struggling at the moment. Year after year, they have seen their budgets slashed, with limited ways to raise more revenue, all within a stagnant economic climate.
This week, our friends over the border at Kent County Council wrote to Chancellor Jeremy Hunt to warn that without significant government intervention, they would likely have to declare bankruptcy within a year.
Talking to KentOnline, Medway Council Leader Cllr Alan Jarrett said that he did not envision the same thing happening here anytime soon.
But how true is that?
Medway Council published their provisional plans for next year’s budget this week, and it makes for grim reading.
Before the start of each financial year, every local council has to create and pass a balanced budget for the coming year. Medway tends to do this in February, and over each year recently, it’s been presented as more difficult than the last.
That amount is covered by a combination of council tax income (around £138m), government grants (around £142m), fees and other income (around £145m), business rates (£66m), and a final £5m that is set to come from dipping into the reserves of the council.
That dipping into the reserves has become a common refrain in recent years.
So what does next year look like?
Initial projections for the coming financial year started off showing a potential budget gap for Medway Council of £33m-£56m.
That’s a lot of money, so thankfully some helpful savings were able to bring that down to a mere £29m instead.
Now, remember earlier on when we talked about how dipping into reserves has become the usual tactic to cover any gaps?
The slight problem there is that Medway Council, having dipped in previously, now only has £26m available in reserves.
This would make it impossible to present a balanced budget at next year’s budget-setting meeting.
Helpfully, they have run the numbers again and found some savings, and now and got the budget gap down to a trifling £19m or so.
So, that means we’re all good then? Medway Council technically balances the budget, albeit by eating up most of their reserves, they avoid bankruptcy, and we get to keep most of the service provision we all know and love.
Assuming the numbers are all correct, that might be the case. Announcements in the Autumn Statement that councils can increase council tax by 5% instead of the usual 3% will certainly help matters a little, but it won’t plug the entire gap.
But it’s also difficult to not question the assumptions Medway Council are making here. There seems to be little consideration for inflation and higher costs of living in this calculation, particularly the knock-on effect this will have in revenue raising.
But we might get through 2023/24.
The problem comes the following year. By that point, Medway Council has burnt through the vast majority of its reserves, and without significant increases in income from central government, it’s hard to see how they will be able to sustain the current level of budget through another year.
Now, a cynic might suggest that they are pushing through this year ahead of an election without any significant cuts, before slashing services and jobs next year in an attempt to save money.
Someone even more cynical than that could suggest that the Conservative administration knows they are on the way out in next May’s elections, and so are leaving an even bigger problem for the next administration to have to deal with.
It’s going to be a rough few years.
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But we might get a new leisure centre
Last week, councillors at Medway agreed to move forward with the replacement of the Splashes swimming pool and leisure centre, with an increased cost totalling £25m.
When work was originally proposed to refurbish and update Splashes, Medway Council allowed a budget of £5m. When structural problems were discovered that meant the existing building had to be demolished and replaced, this jumped to £18m.
Less than a year later, councillors were asked to add another £7m to that total, citing economic volatility. This will be funded by additional borrowing, meaning the project will be costing £1.6m each year just in debt service, as well as the £500,000 in running costs.
Councillors during the discussion fairly raised questions about what happens when another of Medway’s ageing leisure centres may need replacement, correctly pointing out that these projects can’t keep being funded purely with expensive borrowing, particularly in this economic climate.
But still, it’s an election year, so the good people of Rainham will get their new leisure centre. Eventually, anyway.
Covid in numbers
Cases: There are still no specific data, but 1.6% of the population in the south east are estimated to test positive for coronavirus this week, down from 2.3% last week.
Hospitalisations: There are currently 16 patients being treated for covid in Medway Hospital, with none of them on a ventilator. This is down 33% on last week.
Deaths: 2 new deaths were recorded this week, taking Medway to 991 covid deaths in total.
Vaccinations: 81% of the 12+ population in Medway have now had at least one vaccine dose, 77% have had two doses, and 60% have received a booster dose.
78% of those eligible for a spring booster received one.
10% of those under 12 have had at least one dose of the vaccine.
58% of those aged 50+ have so far had their autumn booster.
Don’t forget your voting papers
This is a subject I’m likely to come back to again before the local elections in May, but I just want to quickly flag it up now.
You may or may not be aware that the government is requiring elections to be run with voters having to show ID at polling stations from May next year. Helpfully, this is when Medway Council has local elections, so we’re going to be one of the earliest cases of this.
Now, voter ID is obviously bullshit and an almost comically transparent way of disenfranchising younger or marginalised parts of our society. But that isn’t the point here.
The law requires local councils to supply a free and usable voter ID card for any residents that need them to ensure that they can vote. Which is great in theory.
In reality, no guidance has been offered from central government on how to do this, nor has there been any sign of funding to do so. With local elections a little over five months away, this is slightly worrying.
As such, if you intend to vote next year, I would urge you to make sure that you have one of the forms of acceptable ID from this list, and if not, maybe consider getting yourself one.
Consulting Rainham on developing Hoo
Weird move from Medway Council this week, who after consulting across the Hoo peninsula for weeks on how the area should be developed, held their final consultation events in, er, Rainham, Lordswood, and Chatham.
Now, I’m no expert, but this feels like an excellent way to get more positive comments on your consultation.
Ask the people in Hoo and the surrounding area if they want 10,000 new homes near them and you probably won’t get a great response. Ask the people in Rainham if they’d rather put houses on Hoo instead in their own backyard and you’re onto a winner. Genius!
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Music that soundtracked the creation of this newsletter: American Water by Silver Jews, Teenage Retirement by Chumped, Sissy Hits by Dananananaykroyd, and Grace and the Bigger Picture by Johnny Foreigner.