Every year, Medway Council sets a budget. It is a plan for how much the council will spend, and how it will pay for it. By law, that plan has to balance. The money going out cannot be more than the money coming in.
This year’s Medway Council Finances plan was agreed by councillors on 25 February 2026. It set out spending of £523.8 million. We are now only two months into the financial year. And the council is already telling us the plan has gone wrong.
A new report to Cabinet on 4 August. It shows that Medway is on course to spend £26.7 million more than it planned. That is money the council does not have. It is a big number, and it did not appear by accident. It is the result of choices, forecasts and management by the people who run the council.
This post looks at what the report actually says. It is not written to frighten anyone. It is written so that residents can see the state of the council’s finances in plain terms, and can judge for themselves whether the administration has a grip on the money. I have written about this issue on two occasions in December 2025 and again in January 2026 nothing has changed.
What the report says about Medway Council Finances
Let me explain a few words first about Medway Council finances. The revenue budget is the money the council spends on day-to-day services. Things like bin collections, care for older people, and help for families. It is separate from money spent on buildings and big projects. A forecast is the council’s best guess at where spending will end up by the end of the year. A variance is the gap between the plan and the forecast. When spending is higher than planned, that gap is an overspend.
Here is what the report forecasts.
Before any action to cut costs, Medway Council finances is heading for an overspend of £42.8 million. The council then lists a set of savings it hopes to make during the year. It calls these “management actions”, and they add up to £16.1 million. Take those off, and the council is still left with an overspend of £26.7 million.
That is 5.1 per cent over budget. And it is only Round 1, based on figures up to the end of May. We are near the start of the year, not the end.
Why £26.7 million is such a problem
Councils are meant to keep a pot of money for a rainy day. It is called reserves. It is there to cover shocks and surprises.
Medway’s general reserves stand at just over £10 million.
Read that again next to the overspend. The council is forecasting a £26.7 million hole. Its savings pot holds about £10 million. The hole is more than double what the council has put by.
The report says this plainly. It admits the council “would not therefore be in a position to fund an overspend on the scale of that currently projected.” In other words, if the overspend is real, Medway cannot pay for it out of its own reserves.
So what happens then? The report gives the answer. It says the council may have to ask the government for emergency help. This is called Exceptional Financial Support. It is not a gift. It is permission to borrow, to plug the gap. Medway has already leaned on this kind of support in recent years. Now the report raises it again.
There is a more serious word in the report too. It is Section 114. This is the legal notice a council’s finance chief must issue if he believes spending is about to run past the money available. In plain terms, it is close to a council saying it cannot balance its books. The report sets out the law on this in full. It is a sign of how serious the position is that officers felt the need to spell it out.
The bigger number: £60 million of emergency help, and counting
The £26.7 million overspend is not the whole story. It sits on top of something larger.
For three years running, Medway has not been able to balance its books on its own. Each year it has gone to the government for emergency help. This is the Exceptional Financial Support I mentioned above: special permission to borrow money to cover the gap between what the council spends and what it raises.
The council has now leaned on this help three years in a row. In its own budget papers for 2026/27, it confirms this is “the third and final planned year” of asking.
The pattern is telling. The council first asked for £14.8 million to cover 2024/25, then had to come back for £8.2 million more when that was not enough. It needed £18.5 million to cover 2025/26. And for this year, it has requested a further £10.1 million. Each year the bill has been topped up as the shortfalls grew.
Added together, and as reported when the budget passed in February, the total support since 2024 reached £60.6 million. That is the amount of emergency borrowing this administration has needed simply to keep going.
Now put this year’s forecast next to it. The £10.1 million of support for 2026/27 was meant to balance the budget. Yet only two months in, the council is already forecasting a further £26.7 million overspend on top of it. Add that to the running total, and the gap this administration has opened up between spending and income climbs towards £87 million.
That is the truest measure of the problem. Not one bad year, but three in a row of spending more than the council brings in, and a fourth now heading the same way. On this trajectory, it is not hard to see the total passing £100 million before Medway Council is scrapped and replaced under the government’s reorganisation of local government. That is the cost of Labour in power in Medway.
Where the money is going
The overspend is not spread evenly. A few areas are driving most of it.
Adult social care is the biggest by far. This is the care the council pays for to support older and disabled people. After the planned savings, it is forecast to overspend by £18.7 million. The council says demand keeps rising and the cost of each care package keeps going up. It notes that the total cost of care packages has grown by about 12 per cent a year, and reached £133 million last year.
Nobody sensible argues that vulnerable people should go without care. That is not the point. The point is that the council set a budget for this in February, and by May the budget was already millions short. Either the pressure was not seen coming, or it was seen and the budget was set too low anyway. Neither is comfortable.
Children’s services is forecast to overspend by £5.2 million, even after savings. Much of this is the cost of placements for children in care. The council budgeted for 42 children in expensive residential placements. It now has 50. Some of these placements cost more than £15,000 a week for a single child.
Homelessness and temporary accommodation is forecast to overspend by £2.7 million. Temporary accommodation is where the council houses families who have nowhere else to go, often in nightly-paid rooms. The number of households in this position has climbed from a low of 472 in October 2023 to 631 by June 2026. The nightly rate the council pays has risen by 30 per cent in eighteen months. This sits within the Regeneration, Culture and Environment part of the council, which I shadow, and it is one of the fastest-rising pressures in the whole budget.
Interest on the council’s debt is forecast to overspend by £4.2 million. I will come back to this, because it links directly to the borrowing story I have written about before.
A question of competence
Here is the heart of the matter.
Rising costs in social care are real, and they are not unique to Medway. Councils across the country face them. But that is exactly why they should be planned for. A well-run council builds a realistic budget, watches it closely, and acts early when things drift. The test is not whether pressures exist. The test is whether the people in charge see them coming and manage them.
On that test, this report does not read well for the administration.
Start with the timing. The budget was agreed in late February. By the end of May, only two months into the year, the council was already forecasting a £26.7 million overspend. A gap that size, that early, suggests the original budget was not built on solid ground.
The report almost admits as much. Buried in the detail, it says a “separate targeted piece of work is underway to review the Adult Social Care budget, improve the quality of future forecasting and ensure future budgets are realistic.” Read that carefully. The council is telling us that its future budgets need to be made “realistic”. That is an admission that the current one was not.
Then there are the savings. The council has a plan called the Financial Improvement and Transformation plan. It is meant to deliver savings each year. But the report shows that savings targets which were not delivered in 2024/25 and 2025/26 were simply “rolled forward” into this year’s budget. In plain English, savings that were promised before, and never made, were counted again. A budget that leans on savings which have failed to appear two years running is not a safe budget.
And notice how this report reached the public. It was not part of the main Cabinet agenda. It was added late, as a supplementary item, marked “to follow”, and the Cabinet was asked to treat it as urgent. A council on top of its finances does not usually have to rush its own budget monitoring in through the side door.
Put these together and a pattern appears. The same services overspend year after year. Budgets are set that do not hold. Savings are promised and not delivered. And the warnings arrive late. This is not one bad number. It is a way of running the council’s money that keeps producing the same result.
The debt in the background
I have written before about Medway’s debt, and this report adds to that picture rather than easing it.
Start with what the debt now costs. This year, the council’s bill for interest and financing — the money it pays just to service what it has borrowed — has ballooned to £28.9 million. Not a penny of that empties a bin, fills a pothole, cleans a street or cares for an elderly resident. It simply pays the price of past borrowing. And it is money that, time and again, the residents of Medway tell me they would far rather see spent on the things they actually want.
The council’s budget for interest and financing was built on a hope that borrowing costs would fall to around 4 per cent this year. They have not. The report now expects interest rates to sit just below 5 per cent. Because of that, the council faces extra interest costs of nearly £4.9 million.
Two numbers in the report show why this matters so much. The council has £150 million of debt that has to be refinanced, meaning old loans that must be replaced with new ones, most likely at today’s higher rates. On top of that, it expects to add around £69 million of new borrowing this year to pay for building work and projects.
Most tellingly of all, the report says a “review of the capital programme will need to be undertaken, to assess affordability.” The capital programme is the council’s list of big building and investment schemes. When officers say its affordability now needs reviewing, they are saying, in careful language, that the council may no longer be sure it can afford what it has committed to. That should concern every resident, because the interest on all this borrowing is paid out of the same budget that pays for services.
Who is responsible
The council’s own rules are clear about who carries this. The Cabinet, led by the Leader, is responsible for keeping spending within the budget that Full Council approves. The report on this occasion is presented in the name of the Leader of the Council, Councillor Vince Maple, who holds the finance brief himself.
That is not a small point. When a council’s finances drift this far, this fast, responsibility sits with the person at the top. The report even asks the Cabinet to “instruct” officers to take “urgent actions to bring expenditure back within the budget agreed by Full Council.” So the Leader’s own Cabinet is being told, in its own papers, that urgent action is needed to get spending under control. That is a striking thing for an administration to have to say about itself.
Meanwhile, residents are being asked for more. Council tax went up again this year. Yet the amount of council tax actually collected has slipped, down slightly on last year and still well below where it stood before the pandemic. People are paying more, and the council is still heading £26.7 million into the red.
It is worth seeing the size of this hole in terms residents actually recognise. On the council’s own figures, council tax pays for about 27 per cent of its budget. That is roughly £185 million this year. Now hold the £87.5 million gap against that number. To raise that much from council tax alone, bills across Medway would have to rise by almost half, around 47 per cent, in a single year. That is close to ten times the most the council is even allowed to add to a bill in any one year. It would mean hundreds of pounds more for every household. Nobody is being asked to pay that, of course. But it is the true size of the gap that Councillor Maple’s administration has opened up, measured in the one tax that residents actually see on their bills.
Where this leaves us
None of this means Medway cannot be turned around. It can. But it will take honest budgets, firm control of spending, and leaders willing to make hard choices early rather than late.
That is the real message of this report. Two months into the year, the council is £26.7 million over budget, its reserves cannot cover it, its debt is getting more expensive, and its own officers are warning about the affordability of what lies ahead. These are not the marks of a Council with a firm grip on its finances.
Residents deserve better than budgets that fall apart within weeks of being set. They deserve a council that plans properly, spends carefully, and tells them the truth about the state of the books. On the evidence of this report, Medway does not yet have one.
I will keep reading these reports, and I will keep setting out what they say, in plain terms, so that the people of Medway can see for themselves how their money is being managed.
