Medway Council seeks exceptional powers to stave off bankruptcy
Authority remains on the brink, taking steps to raise revenue
Medway Council is attempting to stave off bankruptcy by requesting significant emergency powers from central government, with one proposal already rejected by Michael Gove’s Department for Levelling Up, Housing and Communities (DLUHC).
We have been reporting regularly on the finances at Medway Council, with the council projecting a £12m overspend this year, and a nearly £39m one for 2024/25. These sorts of figures, seen at councils across the country, are unsustainable and were always going to result in drastic action in an attempt to avert disaster.
Following a detailed review of Medway’s finances by the Chartered Institute of Public Finance and Accountancy (CIPFA), recommendations have been made on how Medway Council could avoid issuing a Section 114 notice, which effectively means they can no longer balance their budget.
CIPFA’s report makes it clear that “Medway is in a grave situation concerning its financial sustainability”, and that “it will not be possible to set a balanced budget that is credible and does not result in an overspend in 2024/25 without some form of intervention from Government.”
Medway Council requested the ability to raise council tax by further than the legal maximum of 5%. However, the authority learnt today that this request has not been granted, meaning council tax will rise in April by the usual 4.994% amount.
Medway Council are also seeking powers to increase borrowing to cover the shortfall in the budget for the coming year alongside a range of cuts and price increases that could in theory see a sustainable financial position returned to by 2026/27.
Measures proposed to ensure the budget can be balanced: