Medway Council’s budget will be £1.7 million lower than had been previously thought, after details of central government funding have been released.

New figures from the Town’s authority show a shortfall from what was anticipated in the draft budget in November.

The Provisional Government Settlement, which was released in December, outlines how much Westminster allocates to local councils for the running of services.

Now Medway Council has released its analysis of how the changes, a 6.5% increase, will actually translate into reality.

While the overall core-spending power, a projection of how much the council takes in through grants, central government funding, and council tax, is expected to increase by over £15 million, some grants, such as the Services Grant and the New Homes Bonus, will be less generous than previously believed.

For the 2024/25 financial year, the latest figures show that Medway will have £260 million to work with, an increase from last year’s £245 million.

However the Services Grant, which the government introduced as a one-off in 2022 for topping up council finances but continued at a reduced amount the following year, was reduced again but more than officers expected.

The payment, which amounted to just under £2 million in 2023/24, has been reduced by 85% to just £306,000.

Similarly, the New Homes Bonus, which rewards councils that build, will be £1.6 million for Medway instead of the predicted £2 million because fewer homes that qualify for the money have been delivered than expected.

Other grants will provide more for the council than had been anticipated, with the revenue support grant being £7.8 million, which is £46,000 more than had been projected in the draft budget, and the social care grant being £16.7 million, £323,000 more than had been thought.

Many grants were confirmed to be funded at the levels predicted in Medway Council’s draft budget in November.

The report expressed concern there was no mention in the provisional settlement about the Household Support Fund (HSF) and there was no plans announced to extend the scheme which provides financial support to residents.

They say although the removal of the fund would not impact the authority’s budget directly, the scheme is a lifeline for struggling families which has distributed over £10 million in support since it began in 2021.

When the provisional statement was released last month, council leader Vince Maple (Lab) said the increase amounted to “no help at all”.

He said: “This goes nowhere near supporting us. It’s a real terms backward step.

“The government had the opportunity to support councils like Medway and, bluntly, have left us to just get on with it. No support at all.

“It’s becoming increasingly clear with both the autumn statement and the local government provisional settlement that they’re simply not listening.”

The settlement also attracted criticism from the Tory-run Kent County Council, as well as the Local Government Association (LGA) who said councils were not being given enough.

Upon the announcement, Cllr Shaun Davies, chair of the LGA, said: “Today’s settlement does not provide enough funding to meet the severe cost and demand pressures which have left councils of all political colours and types warning of the serious challenges they face to set balanced budgets next year.

“The funding uplift announced by the government today assumes that all councils will increase their council tax bills by the maximum allowed in 2024/25.

“The government urgently needs to address the growing financial crisis facing councils and come up with a long-term plan to sufficiently fund local services through multi-year settlements.”

Medway Council has a projected £12 million overspend it has to reduce before the end of the financial year and has to make severe cost-cutting measures to avoid effective bankruptcy by balancing the books.

By receiving £1.7 million less than had been anticipated, the authority has a greater challenge ahead of it to cover its services while costs continue to rise.