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Inspectors reviewing weaknesses in special education needs in the Towns say progress is being made to turn around the service.
But Medway Council and the Medway Clinical Commissioning Group (CCG) have been told they still need to make further improvements across the department.
The council today announced it is launching a new strategy outlining how it will develop the service to support children with special education needs and disabilities (SEND).
A joint inspection by Ofsted and the Care Quality Commission (CQC) carried out in 2017 found eight areas of "significant weakness" leading to an official action plan being drawn up.
After a revisit shortly before Christmas, inspectors say the council has made "sufficient progress in addressing five of the eight" issues previously identified.
In a letter published today by the education and health watchdogs, inspectors said the service was improving in:
Specialist training and new roles within schools have helped make improvements, meanwhile inspectors praised "a network of skilled and committed professionals" working to make the service better.
But the inspectors' report states better strategic leadership between the council, CCG and education providers is required.
Inspectors noted leaders in Medway have been "slow to establish" shared responsibility to put reforms in place which meant young people were having "variable" experiences in accessing support for health, education and social care needs.
Parents also said they are "yet to feel the impact of any changes", according to the inspectors' report.
They added the service is also lacking a clear strategy shared with leaders throughout Medway.
The final area of improvement was listed as the Education Healthcare Plans (EHCP) as "many children and young people continue to have plans of poor quality".
The report states this is because many plans are being "amended at points of transition".
Inspectors noted there had been an increase in the overall quality of EHCPs but had only been secured in recent months.
"It is encouraging that Medway agencies have improved in many of the areas identified"
But there remains "insufficient input from social care" even when the department has a statutory responsibility.
The council remains in trouble with its children's services department still being scrutinised by a government-appointed inspector.
In a bid to tackle the remaining challenges, the council and CCG is launching a new SEND strategy incorporating seven priorities and actions after consulting with parents and young people.
Medway Council says the plan will help children with SEND requirements "live fulfilled lives and achieve independence in their local community".
The authority says its strategy will aim to set out early identification for children, inclusive provision in mainstream schools, enough school places in the Medway Towns, promoting independent skills, increasing working with parents and pupils, planning and pooling resources and making sure children have the best physical and mental health.
Funding for SEND in Medway is currently £10 million overbudget over the last two years and finance chiefs are working with the government to reduce its deficit through a management plan.
The council is expecting to need to fund 484 more special school places, 200 more resourced provision places and 500 more children supported through mainstream placements before 2024/25.
Cllr Josie Iles (Con), Medway Council’s portfolio holder for children’s services, said: "It is encouraging that Medway agencies have improved in many of the areas identified by the initial inspection, however, we recognise that there is still some way to go to better support children with special educational needs and disabilities.
“We are working even closer with Medway CCG and other key partners, such as schools, to improve on the three remaining areas, as well as to sustainably maintain the five areas we have already improved.
“We are pleased to be launching our strategy today setting out a clear direction of travel for SEND services locally to together ensure all our children and young people with SEND are provided with opportunities to reach their full potential.
"It will require all parties to pull together over the coming years to tackle the ongoing challenges."
But Labour councillor Clive Johnson said it's another example of the Conservative's "shocking record" for service to young people in Medway.
Cllr Johnson, the group's children's service spokesman, said: "I know from talking to residents that children and families are struggling with the impact of years of austerity-driven underfunding that has resulted in the recent Ofsted judgement of Inadequate for its Children's Services.
"But, crucially, the Conservatives have also struggled to support our young people with special needs and disabilities.
"Massive underfunding has resulted in poor provision for these young people.
"I'm pleased to see the latest progress identified by Ofsted in its latest judgement but there is still much more to be done.
"My key message is clear: Medway's vulnerable children deserve better than this slipshod Conservative leadership who should not have allowed this appalling deterioration in the first place."
Medway's chief nurse Paula Wilkins said the CCG is pleased with progress being made and improvements taking place to work more efficiently together with the council.
A spokesman for the Medway Parents and Carers Forum, which worked with inspectors, said the group was pleased to see steps had been taken but added: "We feel there is still much work outstanding.
"The Forum will continue to offer parents a voice and to support them, providing clear and effective challenge to both service commissioners and providers to ensure that the service our children and young people receive in the future is of the highest possible quality."
