Councillors face “difficult decisions ahead” as they hold early discussions to try and balance the books.

Medway Council’s cabinet approved budget documents showing a £11.2 million overspend this year and an expected £26.5m shortfall next year at a meeting last night (November 19).

The council has put together financial documents outlining its situation in the hope of starting discussions with central government about support they can offer.

Speaking at the meeting, council leader Vince Maple (Lab) introduced the reports saying officers had worked hard to reduce the projected overspend but more work needed to be done.

He said: “We’re not in the place we want to be, but many of those overspends are not down to poor management but instead increasing demand which is not unique to Medway.

“We are continuing to have to make difficult decisions, but we’re following the plan agreed with the Chartered Institute of Public Finance and Accountancy (CIPFA), we’ve brought them back again to get their recommendations on a way forward.”

In February, Medway Council predicted it would need £16.3m in exceptional financial support (EFS) for the next financial year. However, the report approved last night said the authority needed another £10 million, a total shortfall of £26.2m.

It said without the additional EFS from central government the risk of Medway Council having to file a Section 114 order - effective bankruptcy - was “very likely”.

Speaking on the draft budget for the next year he highlighted how the council had put together a report earlier than ever before in order to start conversations with central government about a solution.

He said: “This is the earliest, most detailed budget in my 18 years as a councillor. That doesn’t happen by itself. We’re having to take some difficult choices, but we’re in a good position because we’ve got far more detailed information.”

However Cllr Maple added the ministry of housing, communities and local government was more co-operative under the new Labour government than it had been with Michael Gove in charge.

He continued: “There has been a complete change of tone from the adversarial approach to a recognition that the challenges many councils across the country are facing are not of their own making.

“There’s a far more collaborative and co-operative approach.”

Speaking after the council meeting, Cllr Maple explained why the shortfall for next year had risen.

He said: “In a number of areas where we have statutory responsibilities there are increasing pressures, whether that is temporary accommodation, adults and children's social care, or special educational needs. We have a duty and a role to play from a legal perspective but also a moral perspective.

“We're working hard to make those systems as efficient as possible, making some challenging decisions around those service deliveries, but also working with central government and with other councils as well, because in many cases we are not alone in this.

“It is a difficult task, but it's one that myself and the cabinet are getting to grips with on a daily basis and making those tough choices where we need to be talking to the community and saying ‘this is what we've got to do to get us to that position of financial sustainability”.”

The second round of revenue budget monitoring predicts, if no further improvements are made, Medway Council will overspend its budget for this year by £11.2m, a reduction of £5.3m from round one in July.

This time last year, the council faced a similarly sized overspend of £12m, which was reduced by the following February - but ultimately the budget was balanced using some of the authority’s reserves.

Cabinet members also considered the draft budget for next financial year which predicts the council will face a £26.5m shortfall.

This is largely down to rising costs of social care, as well as changes made by the Chancellor Rachel Reeves in her budget, such as increased national insurance contributions for employers and an increase in the minimum wage.

Cllr Harinder Mahil (Lab) said difficult decisions would be necessary, but the advanced nature of the reports at such an early stage meant the authority could plan ahead much better.

He said: “The fact this report is ready earlier than ever before means many practical and important things which will benefit us.

“It means we can be proactive and we won’t need to rely on any surprise announcements for allocation on the day of the budget, and it also means we’ve been able to make cost-saving measures much earlier so we can accrue savings over more of the year.

“It also means we’ll be able to right-size services earlier in the year and get additional resources where they can make the most impact, some of which feed back into cost-saving.

Following the release of the reports last week, Medway’s Conservative group said they were concerned about the financial situation of the council.

Deputy leader of the opposition and shadow cabinet member for finance, property and workforce, Cllr Gary Hackwell, said: “The figures in this report are extremely concerning, we are yet to hear anything from the Labour government and administration which both seem by all accounts to be taking a very relaxed approach.

“I urge the leader of the council to lobby the secretary of state to find a permanent solution to the worsening financial situation the council finds itself in, and set a sustainable pathway in the years ahead.”

In order to balance its budget earlier this year, Medway Council made an agreement with central government - with the help of assessments by the CIPFA - for EFS to help the authority get on a stable financial footing.

EFS does not grant the council more money but allows the authority to borrow in order to cover the day-to-day running of council services - something typically not allowed.

The EFS agreed for the 2024/25 financial year was £14.7m and reports at the time expected £16.3m would be required for 2025/26.

However, the draft budget now predicts the authority will need almost another £10m for next year - believing the cost of running the council will increase the shortfall to £26.5m.

The reports outlining Medway Council’s financial problems were approved by the cabinet and officers will now work on reducing the projected overspend for this financial year by February.

Additionally, they will discuss with central government and create plans of how to produce a balanced budget for next financial year, also by February.