Medway Council has been granted its request by the government for “exceptional financial support” to avoid effective bankruptcy.

A written statement from the department for levelling up, housing, and communities (DLUHC) announced today (February 29) it will allow selected local authorities to borrow more money.

Medway Council was included in the list of local councils which will be allowed to access additional funds to cover some of its running costs – which local authorities are not typically allowed to do – as well as to pay up-front costs for efficiency schemes.

The council announced earlier this month it would be asking Westminster to be allowed to borrow £14.7 million in order to balance the books and get on a stronger financial footing.

This was based upon recommendations from the Chartered Institute of Public Finance and Accountancy (CIPFA), who the council invited in to look over the authority’s books in November.

CIPFA recommended this approach and said without it the council could not create a credible budget. In effect, saying without it the council would have to declare a Section 114 notice, commonly known as bankruptcy.

The permission does not mean Medway Council is receiving extra funding from central government, just that it can borrow money in the short-term which it will have to pay off later.

The announcement comes as the authority is set to meet tonight to agree its budget for the coming financial year, something it may not have been able to do without the confirmation from DLUHC.

Medway Council leader Vince Maple has previously spoken of the tough decisions ahead.

He said: “We've had to take some very challenging decisions, and I think the people of Medway will understand that these decisions are with the backdrop of that [CIPFA] report and the recommendations.

“We're very open and transparent about the situation we find ourselves in, but undoubtedly there are some challenges in here, some things that will impact on individuals and families.”

In their statement to Parliament announcing the move, minister for local government Simon Hoare (Con), said the permission to borrow was only for councils in exceptional circumstances.

He also said the exceptional support will come with conditions for efficiencies and councils will be required to show improvements which justify the use of powers.

The council administration will make a statement on the announcement at this evening's full council meeting (February 29).