Council tax is frozen in Medway for another year, but councillors warned it will be a "ticking time-bomb" as they passed their annual budget last night.

Members debated the budget for three hours, including a plan to almost halve a £4.6 million fund for ex-offenders, addicts and victims of domestic violence.

The headline figure for most residents is Medway's council tax will remain the lowest in Kent, and the seventh-lowest of any unitary council in the country, after the government provided a "freeze grant".

Yet councillors from all parties - including finance chief Cllr Alan Jarrett (Con) - warned the move will leave a £2.5 million hole this time next year, when it runs out.

Cllr Jarrett accepted the grant despite other Kent councils refusing it.: "At a difficult financial time people will not appreciate a rise in council tax, but it is not the right financial choice to make because of the knock-on effect in future years."

Labour finance chief Cllr Vince Maple (Lab) was clear: "It is a ticking time-bomb. The ongoing freezing of council tax can't be seen as a panacea for all ills of the government."

There were protests over plans to reduce the Supporting People budget, which helps some of Medway's most vulnerable people, from £4.6 million to £2.6 million after the government cut a grant.

Charities and voluntary groups, described by Cllr Maple as part of the "Big Society", have warned they will face closure.

Other measures in the budget included:

• A last-minute loan of £1.5 million to cover yet more overspends on Chatham's bus station (more on this in Monday's Messenger).
• Raise parking chargesby10p, netting the council £221,000 to helpfund half-price bus travel for under-18s.
• £200,000 for 2012 celebrations including the Olympicsand the Queen's Diamond Jubilee.
• A fighting fund of £50,000against Thames estuary airport plans.
• £50,000 more for council leader Rodney Chambers for his "endeavours to generate additional investment in the Medway area."
• Free parking at Christmas to be reinstated costing £50,000.
• Retain free swimming and the council's apprenticeships scheme, and fund training for school governors.
• Closing down the Park and Ride in Horsted, saving £72,000.
• Pay freeze for council staff, except a £250payment for about 1,200 staff earning less than £21,500, saving £1.6 million over three years.
• Review contracts for transporting children with special educational needs, saving £900,000.
• Make £500,000 savings from "early intervention" programmes, including removing £200,000 in reserves from the Towns'19 Sure Start centres. Cabinet members say the move will not affect front-line services.
• Potential savings of £800,000 from plans to outsource three care homes, which were assumed to be £1.6 million before fierce protests put some aspects of the plans on hold.

In-depth coverage in the Medway Messenger, out Monday.